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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

Anybody Investing in bond funds?
Hank: FD - Just a reaction to your use of “proprietary”. It sounds as if you can’t share your approach on a board dedicated to sharing and helping one another. But perhaps I misunderstood your intent. Sorry if I offended you.
FD: I did share, read the link. The following is a main tech indicator I have used called, three line break. For over a year now, all my bond trades were in HY Munis using 2 out of the 3 funds each time (ORNAX,NHMAX,XXXXX). This (chart) shows how it works. Green bars=buy, Red bars=sell. This is a decent indicator that works with many bond funds. How and What else I do is proprietary, especially using mainly 2 funds. This is why I bought in the middle of last week.
But, there is a change. The Fed fund rate, as we know it now, is stabilized at +-0.25% for the next several months. This means to me that finally, the risk of higher rates is lower, I can use other categories, and Multi is where I find unique funds. Munis were easier to predict with my trades and behave better than treasuries.
I already posted that this time I bought NHMAX. This fund is usually the riskiest, the chance is for a better upside this time. As of April 30, it has an effective leverage of 27.3% per Nuveen site, there isn't other HY Muni OEF with such a leverage, unless I missed it.
So, after more than a year trading only HY munis, this time NHMAX is only a small % of my portfolio, the other bond fund isn't.
========
Dear stillers:
1) Let me ask you an easy question. Why did you use 3 different names(stillers,Arriba, Albie) on different sites? Did you try to hide something?
2) Why don't you try to register on BB as stillers? You have no chance with the moderator who knows you for years.
BTW, the subject of this thread is bond, why not make comments on it?

FD1000 June 2023 in Fund Discussions
Anybody Investing in bond funds?
I read the Vanguard report. Dated from this past April. I read no surprises, actually. Two-thirds of my bonds are in junk. And lately, we added Tips SCHP. It's breaking even, or just barely below, for the duration we've owned that ETF. TUHYX yield = 7.45%. PRCPX yield = 6.75% and HYDB yield = 6.61%. Higher up the food-chain, SCHP yield = 5.85%. I'm not complaining.
(On the other hand, BRUFX sits in the 100th percentile among peers. That is cruddy and terrible.)

Crash June 2023 in Fund Discussions
Anybody Investing in bond funds?
In this week’s Barron’s ”Up & Down Wall Street” Randall Forsyth cites 2 veteran bond traders, 89 year old Dan Fuss & Louise Yamada -
“Spoiler alert: These veterans are both cautious now, with a strong preference for short-term Treasury bills.”
Forsyth’s tune changes week-to-week, so don’t take this too seriously. But the overall tone this week, anyway, is that we’re into the early stages year of what will me a decades long rise in rates. (bear market for bonds). That supposedly explains the caution of the two veterans. It is also noted that l”Over two-plus centuries, U.S. longterm rates have oscillated around an average of 5% …”
[snip]
@Hank,
I read the Barron's article you referenced.
Mr. Forsyth stated: "we thought it instructive to touch base with two market veterans who were present
at the birth of the previous long-term cycle to get their thoughts on where we might be headed."
I immediately thought of Dan Fuss before reading the next paragraph.
Anyway, Fuss and Yamada are both cautious as you have mentioned.
They are concerned about the government's finances
and suggest positioning for higher yields in the future.
Both market veterans currently prefer shorter-term Treasuries.

Observant1 June 2023 in Fund Discussions
Anybody Investing in bond funds?
In this week’s Barron’s (”Up & Down Wall Street”) Randall Forsyth cites two veteran bond traders, 89 year old Dan Fuss & Louise Yamada …
“Spoiler alert: These veterans are both cautious now, with a strong preference for short-term Treasury bills.”
Forsyth’s tune changes week-to-week, so don’t take it too seriously. But the overall tone this week is that we’re into the early stages of a decades-long rise in interest rates (and a bear market in bonds). That supposedly explains the caution of the two veterans cited. It is also stated that - “Over two-plus centuries, U.S. longterm rates have oscillated around an average of 5% …”
Thanks @Observant1 and @Sven for helping keep this thread on the tracks.

hank June 2023 in Fund Discussions
Anybody Investing in bond funds?
@Sven, @Observant1, Sara DEVEREUX has a feature in the current Barron's. From my Summary, Part 2 (some excerpts also posted earlier by @Observant1),
Sara DEVEREUX, Vanguard Fixed-Income Head. She joined Vanguard in 2019 from Goldman Sachs/GS. After a terrible 2022, BONDS are doing better in 2023; she wears a button, “Bonds Are Back”. She thinks that the US will have a shallow recession in 2023. Inflation fell from its peak but is still high; the core PCE may be +3.3% by 2023YE, +2.xx% by 2024YE. Many supply-related issues have been resolved, but the demand has to cool to tame wages and inflation. The labor market remains strong, but it is a lagging indicator. Due to many factors now, the unemployment rate may peak at 5% in the next recession. The FED may pause in June to assess the impact of its rapid tightening so far, but rates may go up later, and may remain higher for longer. The times now are opportunities for active bond investors (remember, she is at Vanguard!). She likes portfolios of high-quality bonds of short/intermediate duration with some HY and EM (consider those as equity equivalent); munis are also attractive. HY spreads are tight, but their absolute yields are OK. She is avoiding FR/BL as those are of lower quality. Vanguard funds mentioned are VCOBX (core), VCPAX (core plus), VGIT (Treasuries – intermediate), VMSIX (multisector), VTES (short-term muni).

yogibearbull June 2023 in Fund Discussions
Anybody Investing in bond funds?
Hank, if you think that my system is too funny, I welcome you to dive a bit into it(link). Several did and doing very well. The whole idea is to find great risk/reward funds, small AUM is a plus, an uptrend is a must + owning only 2-3 funds.
FD - Just a reaction to your use of “proprietary”. It sounds as if you can’t share your approach on a board dedicated to sharing and helping one another. But perhaps I misunderstood your intent. Sorry if I offended you.
I can’t argue with your idea that investors do best with “great risk/reward funds”. I’d maybe expand that to “great risk/reward opportunities”. Might be a fund. Might be a stock. Might be a bond. Might even be a particular asset manager. Would I ever suggest such here? Unlikely. Too much chance I’d make a bad call and help drive someone else to financial ruin. So at least two of us are reluctant to state where we think investors should currently put their money. But for different reasons.
Glad you’re having a successful year. Wishing you continued success.

hank June 2023 in Fund Discussions
Anybody Investing in bond funds?
Some people have T-DS and some have FD-DS.
Hank, if you think that my system is too funny, I welcome you to dive a bit into it(link). Several did and doing very well. The whole idea is to find great risk/reward funds, small AUM is a plus, an uptrend is a must + owning only 2-3 funds. In the last several years it's mostly bond OEFs. These funds eventually get discovered. I held PIMIX for about 7-8 years, then came IOFIX. HY Munis have always been a part of it.

FD1000 June 2023 in Fund Discussions
Month Ending May MFO Ratings Posted!
@Charles, check out Barron's,
TRADER. Stocks rose as the wall of worry faded away. The RALLY broadened beyond large-caps to small/mid-caps and cyclicals (financials, industrials). The SP500 was in a bear market for 248 days (Edit - the longest since 1948) and it may reach a new high that is +10% away. Of course, there are economic data, the FOMC meeting(s), and a possible recession along the way. Enjoy the rally while it lasts.
https://www.barrons.com/articles/stock-market-gains-as-wall-of-worry-crumbles-what-happens-next-75e1dc1e?mod=past_editions
You may be thinking of the time it took for the SP500 to recover fully, and that was about 5 years after the GFC; however, the allocation funds recovered much faster.

yogibearbull June 2023 in MFO Premium
Month Ending May MFO Ratings Posted!
The 8 June WSJ article mentions:
"U.S. stocks rose Thursday, ending the S&P 500’s longest bear market since the 1940s and marking the start of a new bull run."
That caught me a bit by surprise. Will update this table in July and see if I can understand where that statement is coming from ... I think the GFC bear lasted pretty long ... sure felt that way.
https://www.mutualfundobserver.com/2022/07/the-great-normalization/

Charles June 2023 in MFO Premium
S&P Enters Bull Market
Barron's Cover this week

yogibearbull June 2023 in Other Investing
15% “hit” to ADR dividend payment for “foreign tax”
Thanks @Crash for sharing your previous thread. Sorry I didn’t pick-up on it. We learn as we go sometimes. At least at Fido it’s very easy to click on “Recent Transactions” and get a quick, clear read-out of everything that’s taken place. I didn’t need to call them. As soon as the transaction cleared it was easy to see what had occurred.
After reading your post, I feel fortunate to have selected to buy a stock a country (Switzerland) that’s signature to a treaty with the U.S. and Canada reducing their customary foreign tax to “only” 15%. It appears from your post that Norway is not part of that pact. Uhhh.
A gleam of optimism lies in the excellent commentary from @msf above. From that I discern that if you invest in a foreign country you’re going to get hit with some type of foreign tax - but that this is disguised (or passed on to you) in different ways by mutual funds and not easily discerned by fund holders.
And @rabokma1 was perfectly correct in that tax-deferred accounts like IRAs are not the right place to own a security that is going to be taxed anyway. However, if you own any foreign securities through a mutual fund, truth is you are also getting hit with a “foreign tax” in some manner. So technically, rabokma1’s tax specific advice might appear to apply to mutual funds as well.
@Crash - That 25% hit you encountered is an eye-opener for us all. As far as TRP goes, on the mutual fund side customer support has been abysmal for a long time. But I can’t speak for their brokerage side, having never dealt with it. BTW - There was a very small “foreign transaction fee” posted at Fidelity related to the dividend payout. Not worth mentioning. Pretty common for fiduciaries.
One correction on my part. My previous assertion that a 15% tax on the asset value of a foreign fund might not be any more oppressive than a 1% ER on a foreign fund was incorrect, Actually, working that through in my head, the 15% tax on dividends would probably amount to 2-3 times as much (in dollar terms) as a 1% ER would.

hank June 2023 in Other Investing
15% “hit” to ADR dividend payment for “foreign tax”
I ran into this only days ago. Created a thread about it, hoping for an explanation. The responders were certainly helpful. I heard no indication from TRP that anything will change in a positive way regarding the way this stuff gets posted (or NOT posted!) to the account.
Reminds me of calling "Customer Service." THERE'S an oxymoron. TRP does not clear the trades. It's Pershing. But I can't get to Pershing. I have to talk to TRP. ...Like all those times when you talk to the phone "specialist" at Customer "Service." They have to put you on hold to find out what to do and what exactly to TELL you, waiting patiently. Because they know nothing. And the ones who hold the cards are not accountable, and are not even connected.
Turns out, I paid a 25% tax "withheld at the source." Norway, in my case. (NHYDY.) Not happy about it, but the dividend is worth keeping. That's on top of the fee that TRP stole from me, as well. (For dealing with a foreign dividend.) NHYDY typically pays the dividend only once per year, in May.
https://www.mutualfundobserver.com/discuss/discussion/61160/ork-wtf-transaction-trp-got-an-answer#latest

Crash June 2023 in Other Investing
15% “hit” to ADR dividend payment for “foreign tax”
Thank you @msf / Quick read of your dissertation answers a lot of what I was wondering about. Will study it more after getting in a late day bike ride.
I did have 1 additional thought … While none of us likes paying taxes, owning this company inside an actively managed fund would likely command a 1% or greater management fee. Without doing the math, I suspect that would work out to more than a 15% annual foreign tax on just 2-3% of the asset’s value.
Not to deny the benefit to owning said stock in a taxable account (rather than IRA), but the tax headache from frequent trades would be troublesome for me.

hank June 2023 in Other Investing
Online Brokers - Barron's Rankings, 2023
Online Brokers - Barron's Rankings, 2023
Broker Star Rating Notes
Interactive Brokers 5* IBKR Pro, IBKR Lite
Fidelity 5* Also Solo FidFolios, Fidelity Bloom
Schwab 4.5*
E*Trade 4* Also Power E*Trade
TD Ameritrade 4* Bought by Schwab. Last year in rankings.
More in the link,
https://ybbpersonalfinance.proboards.com/post/1063/thread
https://www.barrons.com/articles/interactive-fidelity-schwab-best-online-brokers-ratings-52d73cb3

yogibearbull June 2023 in Other Investing
15% “hit” to ADR dividend payment for “foreign tax”
@MikeM - Thanks for your contribution. I’m sure you realize I’m concerned particularly about a single stock in this respect. I don’t really know whether the 15% tax paid on one year’s distribution equates to the same tax (if any) an investor would pay if he owned the stock through a fund instead. But your point is a good one.
If it helps any … The annual dividend payout on my ADR amounted to about 2.5% of its value. So I was hit with a 15% tax on that 2.5% payout. Hardly seems enough reason to sell a stock that’s been a good steady-eddy. Or to move to a taxable account with the (than taxable) trading implications. As a portfolio component this stock equals a bit less than 5% of portfolio.
Not a math genius. But I think the tax we’re talking about amounts to: 15% of 2.5% of 5%

hank June 2023 in Other Investing
S&P Enters Bull Market
S&P enters bull as investors flee. That's my headline. I ran across this piece from Reuters on my Fido feed. Excerpts follow:
U.S. equity funds had their biggest weekly outflow in 10 weeks in the seven days to June 7 as investors, worried about rising inflation and an economic slowdown, pulled out their money.
[ellipses]
Refinitiv Lipper data showed investors offloaded a net $16.44 billion worth of U.S. equity funds in their biggest weekly net selling since March 29.
[ellipses]
Among U.S. funds, large- and mid-cap funds experienced net outflows of $7.53 billion and $1.07 billion, respectively. However, small-cap funds saw net inflows totalling approximately $1.15 billion.
Tech sector funds faced outflows of $1.31 billion after five consecutive weeks of inflows, while industrials and consumer discretionary funds pulled in $616 million and $399 million, respectively.
Money market funds received inflows of $19.83 billion, according to the data, reflecting investors' continued preference for these funds as net buyers for the seventh consecutive week.
U.S. bond funds witnessed withdrawals of $561 million, following five consecutive weeks of inflows.
Investors sold U.S. general domestic taxable fixed-income and short/intermediate investment-grade funds amounting to $1.79 billion and $1.45 billion, respectively, while purchasing government funds totalling $1.76 billion.
That is all.

WABAC June 2023 in Other Investing
15% “hit” to ADR dividend payment for “foreign tax”
Came across the following elsewhere - which sounds a bit scary. But the fact that I was “only” hit with the 15% tax suggests to me Fido probably has the necessary paperwork on file with the Swiss government (ADR is Swiss based).
“One issue with ADRs is when the tax treaty rate is lower than the foreign country’s domestic withholding rate. Switzerland has a domestic foreign withholding rate of 35% and a 15% tax treaty withholding rate with the U.S. However, to qualify for the 15% tax treaty rate, investors must file paperwork with the Swiss government beforehand or be subject to the full 35%. If they do not do this ahead of time, the Swiss government will withhold 35% ”
Source
From @yogibearbull - ”The US funds with foreign holdings may pay foreign tax that is included in your yearend 1099.” That’s encouraging within the context here. Right? Doubtful many of us file to reclaim taxes our funds pay on holdings outside the U.S.
Thanks for the Fidelity link Yogi. However, it didn’t get very deep into the weeds. :) As I suggested earlier, the routine trading I do in this holding would likely create a tax nightmare inside a taxable account. In part, it helps offset the once a year tax hit.
After @msf is fully recovered from ingesting smoke I hope he’ll be able to weigh in as well.

hank June 2023 in Other Investing
15% “hit” to ADR dividend payment for “foreign tax”
There may be withholdings of dividends for foreign ADRs. I am not aware of any withholdings related to CGs. The US and Canadian ADRs have friendlier rules.
The US funds with foreign holdings may pay foreign tax that is included in your yearend 1099. You may claim tax credits for those. If more complicated foreign holdings, you may have to include the Form 1116.
While we are at it:
The ADRs can be company-sponsored or noncompany-sponsored.
The US ADRs (tickers ending typically in "Y") are traded normally, without extra exchange fees (about $50 per trade) for foreign listings on the Pink Sheets/OTC (tickers ending typically in "F"). Examples that have both include VW (VWAGY, VWAPY; VLKAF), Porsche Holdings (POAHY, POAHF), SoftBank (SFTBY; SFTBF), etc.
Fido has a basic link on ADRs.
https://www.fidelity.com/learning-center/investment-products/stocks/understanding-american-depositary-receipts

yogibearbull June 2023 in Other Investing
15% “hit” to ADR dividend payment for “foreign tax”
Just had my first encounter. Here’s a link that explains it.
Questions:
- Since the ADR is held inside a Roth, is there an easy way to recover that tax?
- Is it wiser in tax-sheltered accounts to invest in foreign stocks thru U.S. domiciled funds? Do funds employ measures that mitigate or eliminate the tax for such accounts - or are the taxes simply hidden as “other expenses”?
- If you really liked a foreign stock (and the currency hedging aspect) could you still justify owning the ADR in a tax-deferred account while paying the tax?

hank June 2023 in Other Investing
S&P Enters Bull Market
DJIA has more cyclicals, and only 14.62% is "industrials" now. Its price-weighted design is also flawed, but it has been heavily promoted by DJ/NWS and SPGI (in the US and abroad). Walter Cronkite famously said that he just reported DJIA in his daily news broadcasts but didn't fully understand what it was (web search failed to produce any specific quote).
Nasdaq Comp is growth and tech-heavy. Market-cap weighted.
SP500 is a blend (of growth and cyclicals) and is broader. Often, the market-cap weighted SP500 SPY is compared with equal-weight SP500 RSP to see how the broad market is doing.
https://stockcharts.com/h-perf/ui?s=SPY&compare=RSP&id=p26386927283

yogibearbull June 2023 in Other Investing