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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.
  • Thoughts on JEPI?
    Seeking Alpha has several explanations of the options strategies they use. It is pretty complicated compared to funds that use simpler covered call option strategies, like JHQAX or GATEX for example. I just started digging into JEPI and do not yet understand what factors control the yield here. Covered Calls are much easier to understand.
    JEPIX is JP Morgan's mutual fund with the same strategy as JEPI , open for a much longer time
    During the Covid Crash ( March 2020 ) JEPIX lost 25% , similar to SP500. JHQAX dropped 14% and GATEX was down only 11 to 12%, but of course neither JHQAX or GATEX yields 11%. It is unclear how long JEPI yield will continue.
    What about treasuries? Can't beat a risk free 5%!
  • Thoughts on JEPI?
    My 75 y/o parents are considering putting some cash into JEPI as they want some additional income and like the yield (11.49%). They have a growth section in their portfolio (a lot of FCNTX and DODGX both of which they've held for over 35 years) and are considering JEPI for the income side of their portfolio and are willing to sacrifice capital appreciation for the extra income. JEPI has some investments that I simply don't understand and I don't think my parents do either. What are your thoughts on JEPI?
    Thanks in advance for any and all replies!
  • Dodge and Cox Annual Reports posted
    @yogibearbull,
    Thanks - My attempt to re-create my original 4.5% number failed. Those are very big numbers to deal with. (C student in math) :) But I obviously wasn’t including call options in the short positions total.
    I think we both will recall they initiated about a 5% short position in the S&P a year or two ago and gradually lowered that. Around 2% short the S&P is the last reference I remember reading or seeing.
  • Dodge and Cox Annual Reports posted
    @hank, I am looking at NOTIONAL amounts that are the total positions controlled and gains/losses experienced are (almost) on those. For options, the option-delta also comes into play. Amounts invested or current values are smaller as these are leveraged derivatives.
    So, I see:
    $613.73 million (notional) in short futures.
    $846.23 million (notional) in call options
    Some of these positions may offset others.
    Unclear about currencies as only buys and sells are shown, not net positions.
    The fund AUM is $13.51 billion, so 1% is $135.1 million.
    If I was looking for something like this for my personal brokerage account, I would think of it as gross 10%+ exposure to futures and options. This is just an observation, not intended to cause alarm.
  • Dodge and Cox Annual Reports posted
    @yogibearbull - Thanks for insights. My best attempt at those numbers (DODBX) turns up about 4.54% of total fund assets invested in short positions, spread across stocks and bonds.
    I guess the significance of that 4.54% number lies in the eye of the beholder. It is not uncommon for bond funds to carry small tactical short positions on long dated treasuries - while remaining overall long the market. While many alternative type funds short equities, it’s probably quite uncommon for a “balanced” fund to do so. DODBX has always ISTM operated a bit ”out of the mold” anyway - albeit the S&P short position is a recent development.
    @MikeW - Good points. Virtually every participant on this week’s WSW (linked by @Crash in a separate thread) demurred in some manner to what they view as a shifting “power block” among nations and geographic regions - with China part of that. And, generally, they did not view these developments as positive for the U.S. economy, consumers or investors. I can’t help wondering if D&C is still as exuberant over China today as they were December 22, 2022 - the date of the report.
  • Blackstone Child Labor in Slaughterhouses and Low-Road Capitalism 2
    Great article in NYT today about child labor in the U.S. It’s actually pervasive:
    https://nytimes.com/2023/02/25/us/unaccompanied-migrant-child-workers-exploitation.html
    These workers are part of a new economy of exploitation: Migrant children, who have been coming into the United States without their parents in record numbers, are ending up in some of the most punishing jobs in the country, a New York Times investigation found. This shadow work force extends across industries in every state, flouting child labor laws that have been in place for nearly a century. Twelve-year-old roofers in Florida and Tennessee. Underage slaughterhouse workers in Delaware, Mississippi and North Carolina. Children sawing planks of wood on overnight shifts in South Dakota..,.
    …In town after town, children scrub dishes late at night. They run milking machines in Vermont and deliver meals in New York City. They harvest coffee and build lava rock walls around vacation homes in Hawaii. Girls as young as 13 wash hotel sheets in Virginia….
    ….Migrant child labor benefits both under-the-table operations and global corporations, The Times found. In Los Angeles, children stitch “Made in America” tags into J. Crew shirts. They bake dinner rolls sold at Walmart and Target, process milk used in Ben & Jerry’s ice cream and help debone chicken sold at Whole Foods. As recently as the fall, middle-schoolers made Fruit of the Loom socks in Alabama. In Michigan, children make auto parts used by Ford and General Motors.
    The number of unaccompanied minors entering the United States climbed to a high of 130,000 last year — three times what it was five years earlier — and this summer is expected to bring another wave….
    …One of the nation’s largest contract manufacturers, Hearthside [Food Solutions] makes and packages food for companies like Frito-Lay, General Mills and Quaker Oats. “It would be hard to find a cookie or cracker aisle in any leading grocer that does not contain multiple products from Hearthside production facilities,” a Grand Rapids-area plant manager told a trade magazine in 2019.
    General Mills, whose brands include Cheerios, Lucky Charms and Nature Valley, said it recognized “the seriousness of this situation” and was reviewing The Times’s findings. PepsiCo, which owns Frito-Lay and Quaker Oats, declined to comment.
    Three people who until last year worked at one of the biggest employment agencies in Grand Rapids, Forge Industrial Staffing, said Hearthside supervisors were sometimes made aware that they were getting young-looking workers whose identities had been flagged as false.
    “Hearthside didn’t care,” said Nubia Malacara, a former Forge employee who said she had also worked at Hearthside as a minor….
    …While many migrant children are sent to the United States by their parents, others are persuaded to come by adults who plan to profit from their labor.
    Nery Cutzal was 13 when he met his sponsor over Facebook Messenger. Once Nery arrived in Florida, he discovered that he owed more than $4,000 and had to find his own place to live. His sponsor sent him threatening text messages and kept a running list of new debts: $140 for filling out H.H.S. paperwork; $240 for clothes from Walmart; $45 for a taco dinner.
    “Don’t mess with me,” the sponsor wrote. “You don’t mean anything to me.”
    Nery began working until 3 a.m. most nights at a trendy Mexican restaurant near Palm Beach to make the payments. “He said I would be able to go to school and he would take care of me, but it was all lies,” Nery said.
    His father, Leonel Cutzal, said the family had become destitute after a series of bad harvests and had no choice but to send their oldest son north from Guatemala….
    …Teachers at the school estimated that 200 of their immigrant students were working full time while trying to keep up with their classes. The greatest share of Mr. Angstman’s students worked at one of the four Hearthside plants in the city.
    The company, which has 39 factories in the United States, has been cited by the Occupational Safety and Health Administration for 34 violations since 2019, including for unsafe conveyor belts at the plant where Carolina found her job. At least 11 workers suffered amputations in that time. In 2015, a machine caught the hairnet of an Ohio worker and ripped off part of her scalp.
    The history of accidents “shows a corporate culture that lacks urgency to keep workers safe,” an OSHA official wrote after the most recent violation for an amputation.
    Underage workers in Grand Rapids said that spicy dust from immense batches of Flamin’ Hot Cheetos made their lungs sting, and that moving heavy pallets of cereal all night made their backs ache. They worried about their hands getting caught in conveyor belts, which federal law classifies as so hazardous that no child Carolina’s age is permitted to work with them….
    …But these jobs — which are grueling and poorly paid, and thus chronically short-staffed — are exactly where many migrant children are ending up. Adolescents are twice as likely as adults to be seriously injured at work, yet recently arrived preteens and teenagers are running industrial dough mixers, driving massive earthmovers and burning their hands on hot tar as they lay down roofing shingles, The Times found.
    Unaccompanied minors have had their legs torn off in factories and their spines shattered on construction sites, but most of these injuries go uncounted. The Labor Department tracks the deaths of foreign-born child workers but no longer makes them public. Reviewing state and federal safety records and public reports, The Times found a dozen cases of young migrant workers killed since 2017, the last year the Labor Department reported any.
    The deaths include a 14-year-old food delivery worker who was hit by a car while on his bike at a Brooklyn intersection; a 16-year-old who was crushed under a 35-ton tractor-scraper outside Atlanta; and a 15-year-old who fell 50 feet from a roof in Alabama where he was laying down shingles.
    Note like the Packers company owned by Blackstone above, Hearthside is owned by a private equity fund shop, this one called Charlesbank Capital Partners.
  • Dodge and Cox Annual Reports posted
    DODBX Annual Report: Pg 13 has details on short positions. The notional amounts seem high considering the fund AUM of $13.51 billion. Related explanations/descriptions are on pg 18.
  • BONDS, HIATUS ..... March 24, 2023
    Yes, the rally from January is completely unwound by now. I bought junk early in '22 at just the WRONG time. Still -10% down in TUHYX. At some point, maybe the combination of dividends and share price might get me back to "even-steven." I don't EXPECT so. In the meantime, those buzzards can continue to pay me every month at a rate which exceeds IG and CDs, and in my next life, when rates come DOWN, then THAT next iteration of myself can enjoy a profit with it all. (Just under 15% of total portfolio.)
    Together with PRCPX and HYDB, junk is 21.45% of portfolio right now. (Although HYDB is a tiny fraction.) For a particular purpose my wife has in mind over the long haul, we are using SCHP. (TIPs.)
  • BONDS, HIATUS ..... March 24, 2023
    @larryB I found the SOFR numerical and graphic chart HERE. Scroll down a tiny to view. You'll see the numerical column and then a line graph, both with a date range. There are other settings below, but I've not fiddled with those. You'll note that the 4.55 has been in place for awhile and seems to be reflected in MMKT rates. I envision the folks traveling these money paths would be, not unlike some of us here playing SOFR poker; bidding against one another as to how much we're willing to pay in interest for an overnight loan of cash. :) There may be days when no game is played with changes. Save the chart link, if you want to peek going forward.
    SOFR may relate to those who are buying CD's at brokerage, and what numbers for yield they see, too.
    @johnN So many choices for bond exposure. I don't buy singular bonds, but much of the 'world' does for pension funds and related. They'll have their yield locked in, if that is what they want; but for the funds, we're subject to the changing prices. A tricky place to play, many times; if one is not willing to be patient with time, OR is an immaculate trader.
  • Smaller SP-SC 600 ETF SLY Merging into Larger SPSM
    What is the story here?
    State Street was a pioneer and first mover in the ETFs (SPY was the 1st ever ETF in 01/1993).
    For many years, the SEC had approved the ETFs as exceptions to mutual funds, and over time, these exceptions created ETFs with slightly different twists. Firms hung on to these older versions of ETFs because the newer rules were quite different. Some older ETFs also had decent past history and good liquidity due to better intuitional acceptance even when some had high ERs.
    So, many firms developed entirely new "core" versions of their older ETFs that had lower ERs, but the AUMs started out low, and liquidity was not good for institutions, but OK for retail. This is ETF industry version of having its cake and eating it too.
    That is how the "SPDR Portfolio" ETFs came about in 10/2017. These were just what the others have called their "core" ETFs (BlackRock's iShares come to mind and there are several others).
    More recently, there were reforms for the ETFs in 09/2019 and all these older ETF structures based on ETFs-as-exceptions-to-mutual-funds were dumped, and new ETF structures were developed and applied uniformly to almost all ETFs.
    Now to SLY vs SPSM.
    SPDR SLY started in 11/2005. Its current AUM is $1.8 billion and ER is 0.15%. Its benchmark was always SP SC 600.
    SPDR Portfolio SPSM started out in 07/2013 with a different SC index, that was changed to another SC index, and finally changed to SP SC 600 in 2020. Its current AUM is $5.2 billion (much bigger than the original SLY) and ER is 0.05% (much lower than the original SLY).
    So, now, after the changes to SPSM in 2020, the 2 became identical! Why not merge them?
    And that is what State Street is doing now with 06/2023 target. If anything, what took them so long?
  • BONDS, HIATUS ..... March 24, 2023
    Hi @larryB
    I was going to write about this next week, but here we are and that's great; as it relates to your and my own question, too.
    SOFR is a broad measure of the cost of borrowing cash overnight, collateralized by
    U.S. Treasury securities in the repurchase agreement (repo) market.
    There is monetary hand-holding in REPO and SOFR land. LIBOR had this function, but has been replaced with SOFR. LIBOR (London) had a few proven manipulations taking place and was given the boot for this monetary trading arena. Trillions of dollars travel these hidden electronic roads as we eat, sleep, play and other. I don't know about all of the areas using SOFR rates (lack of study time), but some large mortgage companies use the SOFR yield rate to set mortgage rates.
    SOFR New York Fed. Reserve related write up.
    This links to Part II, for the overview. I wouldn't begin to launch this in my own words. I think you'll find some quick decent reading without going crazy.
    SOFR A decent Investopedia definition
    My quick and dirty for SOFR and MMKT rates is that, as FED rates increased....then SOFR rates increased and with watching SOFR rates there is a very close connection in the yields being paid in MMKT's.
    SOFR is reported through the day on Bloomberg tv, and has remained at 4.55 during the same time frame as with the 'flat line' in MMKT yields, generally speaking. for the ones I view. There is a % range for this and I can't find my handy-dandy chart. I'll dig around and place it in this thread; as it can't be more than a few electrons away.
    Hi @Anna Thanks for the kind words. I learn from writing, too.
  • SPDR Bloomberg SASB Corporate Bond ESG Select ETF to liquidate
    https://www.sec.gov/Archives/edgar/data/1064642/000119312523048776/d287555d497.htm
    97 1 d287555d497.htm SPDR SERIES TRUST
    SPDR® SERIES TRUST
    (the “Trust”)
    SPDR Bloomberg SASB Corporate Bond ESG Select ETF
    (the “Fund”)
    Supplement dated February 24, 2023
    to the Summary Prospectus, Prospectus and Statement of Additional Information
    each dated October 31, 2022, as may be supplemented from time to time
    On February 23, 2023, at the recommendation of SSGA Funds Management, Inc., the Trust’s investment adviser, the Trust’s Board of Trustees voted to close and liquidate the Fund.
    The Fund will create and redeem creation units through April 11, 2023, which will also be the last day of trading of the Fund’s shares on the NYSE Arca, Inc., the Fund’s principal U.S. listing exchange. The Fund will cease operations, liquidate its assets, and prepare to distribute proceeds to shareholders of record on or about April 17, 2023 (the “Liquidation Date”). Shareholders of record of the Fund remaining on the Liquidation Date will receive cash at the net asset value of their shares as of such date, which will include any net capital gains and net investment income as of this date that had not been previously distributed. Any net capital gains and net investment income from the previous fiscal year, which were not distributed by the end of the most recent fiscal year-end, may be distributed to shareholders in advance of the Liquidation Date, in what is commonly referred to as a “spillback distribution.”
    Prior to the Liquidation Date, the Fund will be in the process of closing down and liquidating its portfolio, which will result in the Fund not tracking its Index and increasing its holdings in cash and/or cash equivalents, which may not be consistent with the Fund’s investment objective and strategy. Shareholders of the Fund may sell their holdings on the NYSE Arca, Inc. prior to April 12, 2023. Customary brokerage charges may apply to such transactions. From April 12, 2023 through the Liquidation Date, we cannot assure you that there will be a market for your shares.
    On or about April 18, 2023, the Fund will distribute to its remaining shareholders a liquidating cash distribution equal to the current net asset value of their shares. While Fund shareholders remaining on the Liquidation Date will not incur transaction fees, shareholders generally will recognize a capital gain or loss on the redemptions. Shareholders should contact their tax adviser to discuss the income tax consequences of the liquidation.
    Shareholders can call 1-866-787-2257 for additional information.
    PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
    022423SUPP2
  • Invesco liquidates some more ETFs
    https://www.sec.gov/Archives/edgar/data/1378872/000119312523048862/d471458d497.htm
    497 1 d471458d497.htm 497
    INVESCO EXCHANGE-TRADED FUND TRUST II
    SUPPLEMENT DATED FEBRUARY 24, 2023 TO THE:
    PROSPECTUSES AND STATEMENT OF ADDITIONAL INFORMATION
    DATED FEBRUARY 25, 2022, AS PREVIOUSLY SUPPLEMENTED, OF:
    Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)
    Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)
    and
    PROSPECTUSES AND STATEMENT OF ADDITIONAL INFORMATION
    DATED DECEMBER 16, 2022, AS PREVIOUSLY SUPPLEMENTED, OF:
    Invesco PureBetaSM MSCI USA Small Cap ETF (PBSM)
    Invesco PureBetaSM US Aggregate Bond ETF (PBND)
    (PBEE, PBDM, PBSM and PBND are
    each, a “Fund” and collectively, the “Funds”)
    As previously announced, at a meeting held on January 20, 2023, the Board of Trustees of the Invesco Exchange-Traded Fund Trust II (the “Board”) approved the termination and liquidation of each Fund. The liquidation payment to shareholders is now expected to take place on or about June 30, 2023.
    On February 24, 2023, the Board approved a revised timeline for the termination and liquidation of the Funds. Accordingly, the Funds no longer will accept creation orders after the close of business on June 16, 2023. The last day of trading in each Fund on the Cboe BZX Exchange, Inc. (the “Exchange”) will be June 23, 2023. Shareholders should be aware that while the Funds are preparing to liquidate, they will not be pursuing their stated investment objective or engaging in any business activities except for the purposes of winding up their business and affairs, preserving the value of their assets, paying their liabilities, and distributing their remaining assets to shareholders. A liquidation may also be delayed if unforeseen circumstances arise.
    Shareholders may sell their holdings of a Fund on the Exchange until market close on June 23, 2023, and may incur typical transaction fees from their broker-dealer. Each Fund’s shares will no longer trade on the Exchange after market close on June 23, 2023, and the shares will be subsequently delisted. Shareholders who do not sell their shares of a Fund before market close on June 23, 2023 will receive cash equal to the amount of the net asset value of their shares, which will include any capital gains and dividends, in the cash portion of their brokerage accounts, on or about June 30, 2023.
    Shareholders generally will recognize a capital gain or loss equal to the amount received for their shares over or under their adjusted basis in such shares.
    Shareholders should call the Funds’ distributor, Invesco Distributors, Inc., at 1-800-983-0903 for additional information.
    Please Retain This Supplement For Future Reference.
    P-PS-TRUSTII2-PROSAI-SUP 022423
    ================================================================
    https://www.sec.gov/Archives/edgar/data/1418144/000119312523048856/0001193125-23-048856-index.htm
    497 1 d292792d497.htm 497
    INVESCO ACTIVELY MANAGED EXCHANGE-TRADED FUND TRUST
    SUPPLEMENT DATED FEBRUARY 24, 2023 TO THE:
    PROSPECTUSES AND STATEMENT OF ADDITIONAL INFORMATION
    DATED FEBRUARY 25, 2022, AS PREVIOUSLY SUPPLEMENTED, OF:
    Invesco Balanced Multi-Asset Allocation ETF (PSMB)
    Invesco Conservative Multi-Asset Allocation ETF (PSMC)
    Invesco Growth Multi-Asset Allocation ETF (PSMG)
    Invesco Moderately Conservative Multi-Asset Allocation ETF (PSMM)
    (each, a “Fund” and collectively, the “Funds”)
    As previously announced, at a meeting held on January 20, 2023, the Board of Trustees of the Invesco Actively Managed Exchange-Traded Fund Trust (the “Board”) approved the termination and liquidation of each Fund. The liquidation payment to shareholders is now expected to take place on or about June 30, 2023.
    On February 24, 2023, the Board approved a revised timeline for the termination and liquidation of the Funds. Accordingly, the Funds no longer will accept creation orders after the close of business on June 16, 2023. The last day of trading in each Fund on the Cboe BZX Exchange, Inc. (the “Exchange”) will be June 23, 2023. Shareholders should be aware that while the Funds are preparing to liquidate, they will not be pursuing their stated investment objective or engaging in any business activities except for the purposes of winding up their business and affairs, preserving the value of their assets, paying their liabilities, and distributing their remaining assets to shareholders. A liquidation may also be delayed if unforeseen circumstances arise.
    Shareholders may sell their holdings of a Fund on the Exchange until market close on June 23, 2023, and may incur typical transaction fees from their broker-dealer. Each Fund’s shares will no longer trade on the Exchange after market close on June 23, 2023, and the shares will be subsequently delisted. Shareholders who do not sell their shares of a Fund before market close on June 23, 2023 will receive cash equal to the amount of the net asset value of their shares, which will include any capital gains and dividends, in the cash portion of their brokerage accounts, on or about June 30, 2023.
    Shareholders generally will recognize a capital gain or loss equal to the amount received for their shares over or under their adjusted basis in such shares.
    Shareholders should call the Funds’ distributor, Invesco Distributors, Inc., at 1-800-983-0903 for additional information.
    Please Retain This Supplement For Future Reference.
    P-PSM5-PROSAI-SUP 022423
  • SPDR Bloomberg SASB Emerging Markets ESG Select ETF to liquidate
    https://www.sec.gov/Archives/edgar/data/1168164/000119312523048828/d404592d497.htm
    497 1 d404592d497.htm SPDR INDEX SHARES FUNDS
    SPDR® INDEX SHARES FUNDS
    (the “Trust”)
    SPDR Bloomberg SASB Emerging Markets ESG Select ETF
    (the “Fund”)
    Supplement dated February 24, 2023
    to the Summary Prospectus, Prospectus and Statement of Additional Information
    each dated January 31, 2023, as may be supplemented from time to time
    On February 23, 2023, at the recommendation of SSGA Funds Management, Inc., the Trust’s investment adviser, the Trust’s Board of Trustees voted to close and liquidate the Fund.
    The Fund will create and redeem creation units through April 11, 2023, which will also be the last day of trading of the Fund’s shares on the NYSE Arca, Inc., the Fund’s principal U.S. listing exchange. The Fund will cease operations, liquidate its assets, and prepare to distribute proceeds to shareholders of record on or about April 17, 2023 (the “Liquidation Date”). Shareholders of record of the Fund remaining on the Liquidation Date will receive cash at the net asset value of their shares as of such date, which will include any net capital gains and net investment income as of this date that had not been previously distributed. Any net capital gains and net investment income from the previous fiscal year, which were not distributed by the end of the most recent fiscal year-end, may be distributed to shareholders in advance of the Liquidation Date, in what is commonly referred to as a “spillback distribution.”
    Prior to the Liquidation Date, the Fund will be in the process of closing down and liquidating its portfolio, which will result in the Fund not tracking its Index and increasing its holdings in cash and/or cash equivalents, which may not be consistent with the Fund’s investment objective and strategy. Shareholders of the Fund may sell their holdings on the NYSE Arca, Inc. prior to April 12, 2023. Customary brokerage charges may apply to such transactions. From April 12, 2023 through the Liquidation Date, we cannot assure you that there will be a market for your shares.
    On or about April 18, 2023, the Fund will distribute to its remaining shareholders a liquidating cash distribution equal to the current net asset value of their shares. While Fund shareholders remaining on the Liquidation Date will not incur transaction fees, shareholders generally will recognize a capital gain or loss on the redemptions. Shareholders should contact their tax adviser to discuss the income tax consequences of the liquidation.
    Shareholders can call 1-866-787-2257 for additional information.
    PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
    022423SUPP3
  • Dodge and Cox Annual Reports posted
    I’ve read the full report for DODBX and just a quick glance so far at DODEX.
    DODBX: They’ve sliced 2 or 3 % off their previous near -70% allocation to equities, moving that into bonds. Equities are now at 66%. They single out what they see as opportunity in mortgages / mortgage related instruments. And they’ve got a significant hold in international equities - near 15% as I recall.
    I was curious about their previous explained use of a small S&P short position. No mention of it in this year’s commentary. However, the financial accounting page lists 3 shorts. The amounts seem relatively insignificant. A bit of hedging going on.
    E-Mini S&P 500 Index— Short Position
    Euro-Bund Future— Short Position
    Ultra 10 Year U.S. Treasury Note Future— Short Position

    DODEX: Very interesting! Here’s a few excerpts:
    ”2022 was a difficult year for emerging and developed equity markets around the world. Waning economic growth, rising geopolitical tensions, disruption in global supply chains, and tightening monetary policies in the face of surging inflation, all weighed on stocks …
    “From a valuation perspective, emerging markets equities continue to look compelling: the MSCI EM ended the year at 11.3 times forward earnings. Emerging markets value stocks remain attractively priced compared to growth stocks, with a wide valuation spread—nearly two standard deviations above the historical mean. The broad divergence between performance and valuation within emerging markets, coupled with a highly volatile and uncertain global economic and political backdrop, provides a potentially productive setting for (our investment approach).
    “ … The Fund’s holdings, on average, trade at 9.5 times forward earnings, compared to the MSCI EM at 11.3 times. This, coupled with our long-term investment horizon, enables us to invest in companies, industries, and countries that may face significant uncertainty in the short term, but where we believe the long-term prospects are bright. An example of these principles in action is the Fund’s large overweight position in select China Internet holdings, the biggest contributor to the Fund’s outperformance last year.”
    (Boldface mine)
    Re China - They appear to see diamonds where I see mainly refuse (based on the geopolitics). Reminiscent of the circus act of swallowing a burning torch.
  • Jamie Dimon says we might get to 6%
    LOL - I owned the 210. The Bel Air was the top-end. More chrome on the sides behind which road salts could collect and lead to earlier rust problems.
    I picked up my 210 from a local junk yard for around $250 in 1962. Straight-6. Apparently it had seen taxi service in some city. Pretty well wore out by the time I got it. Still a pretty good looker, however, in two-tone green. The 3 speed tranny would occasionally lock-up in reverse. The options were (1) to crawl underneath and manipulate the linkage by hand, or (2) drive back home in reverse - which I recall doing on at least one occasion.
  • Jamie Dimon says we might get to 6%
    Great sketch from David. Sure resembles the classic ‘57 Chevy, prettiest car I ever owned.
    Which model? Even without seeing the sketch (blocked), I can tell from the URL that it is the high end Bel Air. There were two other models, the 150 and the 210.
    https://www.hagertybroker.ca/apps/valuationtools/search/Auto/1957/Chevrolet?type=5&bodytypegroup=2
    in most cases it's the Bel Air that receives the lion's share of attention. One might even go so far as to question whether or not Chevy even produced anything other than the Bel Air (and Corvette) in 1957, yet two other models were rolling for the assembly line: the 150, for the economy-minded consumer, and the 210, which bridged the gap between the 150 and the luxurious Bel Air.
    https://www.hemmings.com/stories/article/1957-chevrolet-150-210-series
    I didn't have the opportunity to drive a 57 Chevy (a 150 straight-6) until decades later, at which point it drove like a truck. Good thing it had a large steering wheel for leverage when turning. I just assumed that the effort required was due to its aged condition. Though even at that age, the manual transmission was the smoothest I've ever driven.
  • BONDS, HIATUS ..... March 24, 2023
    When Hell Freezes Over. February 20 - February 24, 2023

    ***A phrase used to say that one thinks that something will never happen.***
    A snippet of recent correspondence between myself and Jay Powell: I noted to him that I remained concerned that a lot of damage would take place to the economy attempting to achieve a 2% inflation rate in the near future. He replied that the policy was in place and would remain so and until and 'When Hell Freezes Over'. My last reply this week, of which, I've yet to receive his reply, included this image.
    :) :) :)
    Hell, Michigan is near Ann Arbor. The entire area is part of a massive freezing rain storm on Wednesday, and still finds 100,000's without power as of Saturday.
    "Mr. Powell, you and friends, now have your excuse to move rates with caution; as to not break the economy too much."
    --- U.S.$ UP +1.33% for the week, +1.82% YTD (Big POP this week)
    *** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference.
    *** Bonds of most flavors received a face slap 'again' this week. I'm still inclined towards IG bonds for the longer term, being year(s) not months; when the FED rates increases begin to stop and move downward. Duration right now is important for we investors, as the yield's for the short end are 'high'; as noted in the yield curve notations in the above chart. At some point, when the economy finds a defined direction; longer duration will find a path. I keep watching for rotations with yields/pricing, as I lean more towards attempting to find the profit from pricing; but right now I'm happy with the +4% yields of a MMKT. NOTE: MMKT yields have flat lined the past few weeks.
    --- About those MMKT's. As this may be a choice of more folks going forward during likely increased FED rates; and the zig-zag in the equity and bond markets, a look at one component of numerous MMKT funds.
    REPOS: The repo market is essentially a two-way intersection, with cash on one side and Treasury securities on the other. They’re both trying to get to the other side.
    One firm sells securities to a second institution and agrees to purchase back those assets for a higher price by a certain date, typically overnight. The contract those two parties draw up is known as a repo. Essentially, it’s a short-term collateralized loan. And just as most loans come with an interest payment, you can think of the difference between the original price and the second, higher price, as the “interest” paid on that loan. It’s also known as “the repo rate.” More HERE.
    Lastly, one may expect the FED to go back to the well of high rates, eh???; as they may not be pleased with all of the data points they gather. The economy remains too HOT in many sectors!
    A good day to you.....
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    ---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
    NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
    For the WEEK/YTD, NAV price changes, Febuary 20 - Febuary 24, 2023
    ***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo rates and ended the week at 4.47% . The core Fidelity MMKT's have continued a slow creep upward to 4.22%. The holdings of these different funds account for the variances at this time. *** These rates have now mostly flat lined for two weeks.
    --- AGG = -.9% / +.39% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
    --- MINT = +.--% / +1.13% (PIMCO Enhanced short maturity, AAA-BBB rated)
    --- SHY = -.3% / -.1% (UST 1-3 yr bills)
    --- IEI = -.8% / -.4% (UST 3-7 yr notes/bonds)
    --- IEF = -1.13% / -.27% (UST 7-10 yr bonds)
    --- TIP = -.83% / +.11% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
    --- VTIP = -.38% / +.11% (Vanguard Short-Term Infl-Prot Secs ETF)
    --- STPZ = -.48% / -.06% (UST, short duration TIPs bonds, PIMCO)
    --- LTPZ = -1.7% / +1.12% (UST, long duration TIPs bonds, PIMCO)
    --- TLT = -1.38% / +1.67% (I Shares 20+ Yr UST Bond
    --- EDV = -1.5% / +2.6% (UST Vanguard extended duration bonds)
    --- ZROZ = -1.6% / +2.6% (UST., AAA, long duration zero coupon bonds, PIMCO
    --- TBT = +2.8% / -2.9% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
    --- TMF = -4.2% / +1.7% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
    *** Additional important bond sectors, for reference:
    --- BAGIX = -.87% / +.47% (active managed, plain vanilla, high quality bond fund)
    --- LQD = -1.1% / +.71% (I Shares IG, corp. bonds)
    --- BKLN = -.33% / +2.94% (Invesco Senior Loan, Corp. rated BB & lower)
    --- HYG = -.52% / +1.22% (high yield bonds, proxy ETF)
    --- HYD = -.82 %/+1.12% (VanEck HY Muni
    --- MUB = -.63% /-.08% (I Shares, National Muni Bond)
    --- EMB = -.23%/+1.04% (I Shares, USD, Emerging Markets Bond)
    --- CWB = -1.7% / +4.46% (SPDR Bloomberg Convertible Securities)
    --- PFF = -1.03% / +7.2% (I Shares, Preferred & Income Securities)
    --- FZDXX = 4.47% yield (7 day), Fidelity Premium MMKT fund
    *** FZDXX yield was .11%, April,2022.
    Comments and corrections, please.
    Remain curious,
    Catch