“It's not so easy to figure out what these sorts of funds are doing.”
Agreed, it’s very difficult to get “under the hood” of a fund like this. But, if anyone here can, it’s probably @msf - :) With TMSRX’s meager low single digit returns (and apparently many fleeing for greener pastures) I’m not too worried about the degree of risk they’re assuming. If the fund were cranking out 15% annual, I wouldn’t own it. That would be completely out of character with its stated purpose and the risk profile Price has established for it.
“TMSRX is net 48% long in fixed income and net 6% short in equity, both of which should have helped its performance Friday, yet it dropped ½%.”
Not so fast. There are 5 different investment approaches outlined and utilized by the fund. You’ve mentioned 2 or 3. And Friday may have been an aberration for a number of reasons, including very thin trading in the U.S. plus the fact that many international exchanges had suffered severe losses before the U.S. even opened.
Let’s look at how some some common hedges fared Friday. Real Estate and Utilities both were off 2% or more - despite falling rates. Commodities / metals fell in sync with equities. Long bonds prospered - but do you want to own a lot of those? Furthermore, fixed income need not consist of “long only ” bonds. Several of Price’s allocation funds utilize its Dynamic Income fund which tends to move opposite the direction of typical bonds. The investor class, RPIEX, actually lost .82% percent Friday.
http://www.funds.reuters.wallst.com/US/funds/overview.asp?symbol=RPIEX.O.
Let’s give TMSRX another day or two to prove itself - assuming Friday was the beginning of something worse. The benefits of a fund like this don’t always kick-in on day 1 of a broad market selloff. If folks aren’t comfortable with these types of funds, that’s fine. There are other ways to hedge risk, including building cash. I will tell you I work very hard to run a hedged portfolio, including about 5% currently in TAIL - Yet TMSRX did better than I did Friday.

FYI: For those who don't have a subscription to Barron's, here is the link to the complete fund profile of BAMBX that was written by Lewis Braham and published in November of 2020: https://webreprints.djreprints.com/57836.pdf
Fred

Thanks Fred. Awesome piece of writing by Lewis.
The fund? Sounds more like lasagna - a layered approach.

@fred495,
Thanks for the link.
The article provides important information regarding the fund's strategy and its upside/downside ratios.
Since many alternative funds have complex strategies and high costs, I avoid this category.

FYI: For those who don't have a subscription to Barron's, here is the link to the complete fund profile of BAMBX that was written by Lewis Braham and published in November of 2020: https://webreprints.djreprints.com/57836.pdf
Fred

BAMBX is more akin to a hedged bond fund with a small amount of equity than a 130/30 equity fund. It has a three bucket strategy--long high quality bonds, long strong highly leveraged stocks short weak highly leveraged stocks, and a macro strategy that goes long and short global bonds: https://barrons.com/articles/a-2-9b-alternative-fund-that-actually-works-51606264740
The "defensive equity" bucket tends to do pretty well in declines as the weakest stocks with high leverage tend to fair very poorly in declines while strong highly leveraged stocks do better. The managers favor highly leveraged companies on both the long and short side as they tend to have the highest dispersion in returns so that the worst do much worse than the best during downturns while the best highly levered companies hold their own during upturns. It's a complex strategy admittedly.

I'm inclined to agree with @Baseball_Fan that multi-strategy funds are generally a bunch of spaghetti.
Even if one does understand how each alternative strategy tends to work in isolation and even if one does understand how they interact, IMHO two wildly optimistic assumptions, one still does not have any sense of how they are being allocated/used. A fund saying that it "seeks to provide total return ... in both periods of strong returns and periods of market stress" tells me almost nothing about how it uses those alternative strategies.
More studying of a fund may not make it any clearer. M* gave DBLTX a "not rated" mark for two years (2014-2016) because "when ... evaluating sophisticated bond strategies like DoubleLine Total Return Bond, publicly available information often does not suffice."
https://www.morningstar.com/articles/759331/why-were-moving-doubleline-total-return-bond-funds-rating-to-neutral
Yet for most of us peons, public info is all we have to work with. And it's hard to deny that funds like BAMBX are employing sophisticated strategies, bond and other. FWIW, M* decided to change the rating of DBLTX from "not rated" to "neutral" because M* felt it was more informative to say that based on what they knew they could not recommend the fund ("neutral") than to say nothing.
With respect to the BAMBX's portfolio, Lipper is showing net allocations. According to M*, the fund is comprised of 65% short positions and 165% long, which adds up to 100% of the portfolio, net. A lot of shorting going on.
At a superficial level (i.e. just looking at the 165/65 figure), this looks like the 130/30 funds of a decade ago on steroids. Except that for BAMBX that's just a summary of its holdings and not its strategy. Here's a M* piece on the 130/30 funds of yesteryear, and the risks they carried.
https://www.morningstar.com/articles/287718/article
TMSRX is net 48% long in fixed income and net 6% short in equity, both of which should have helped its performance Friday, yet it dropped ½%. It's not so easy to figure out what these sorts of funds are doing. Even less so for BAMFX with a 500% turnover rate.

Not everything was down Friday. DKNG, which has stunk up the joint for several months, sliding from mid-$50s to under $35, gained +1.29% yesterday - bucking the trend.
I’ve long since ditched their stock, but with collegiate basketball and NBA in full swing … am using them for another purpose. :)

So you're going to put your monies into something like that based on one day's performance? [...]
Your money, do with it what you feel is best for you. This fund is not for me. Been burned by iqdax,. Learning my lesson.
I wish you good investing and good luck @fred495
Baseball Fan

What am I missing? There was nothing in my comment about BAMBX's performance record over the past five years that would indicate I was going to put my money into this fund. I would certainly never purchase any fund based on one day's performance.
Seems you misunderstood the purpose of my posting, Fan.
Good luck,
Fred

So you're going to put your monies into something like that based on one day's performance?
My spaghetti bowl statement stands, who knows how any of those positions interact with each other and at what time. It's an obvious guess by the fund managers as to what the tea leaves excuse me models are telling them what will happen going forward.
Your money, do with it what you feel is best for you. This fund is not for me. Been burned by iqdax,. Learning my lesson.
I wish you good investing and good luck @fred495
Baseball Fan

However, yesterday, when all the major indices lost more than 2%, I couldn't help but notice that BAMBX was up 0.2%, and YTD the fund is up a nice 4.3%. Also, three and five year total returns are a pleasing 5.7% and 5.5%, respectively.
Maybe it's not a cash proxy, but not too shabby for a "spaghetti bowl of who knows what".
Fred

Nov 27th Episode:

Part 2 - Nov 30th

SWAN sounds like it's basically a principal protected note (PPN). Don't have time now to find a good reference for how they're constructed. Such a reference will help provide a better understanding of how these work.
Note that the options don't pay divs, so even though the "participation" is uncapped, it doesn't appear that you're getting the equivalent benefit of actually owning SPY.
Other names: equity-linked CD, equity indexed annuity, market linked note, equity linked note, ....
The FAQ for SWAN says that the anticipated participation rate is around 70%, meaning that you'll get only 70% of the appreciation of the S&P 500. And none of the dividends.

Two of my bond funds, DODIX and VUSFX, gained 0.42% and 0.05 % respectively.
All my other holdings were down for the day.
The biggest losers were VTMSX and IVOO which lost 3.xx%.
Today was a shortened trading day with potentially lower liquidity.
It will be interesting to see what happens on Monday.

Appreciate all the discussion above. I’m trying here to achieve a higher degree of accuracy than my preceding comments represented. SWAN is the type of ETF “futures investment” I was referencing - though the terminology I used wasn’t very accurate.
Here’s a description of that strategy:
“The BlackSwan ETF seeks investment results that correspond to the S-Network BlackSwan Core Index (the Index). The Index’s investment strategy seeks uncapped exposure to the S&P 500, while buffering against the possibility of significant losses. Approximately 90% of the ETF will be invested in U.S. Treasury securities, while approximately 10% will be invested in SPY LEAP Options in the form of in-the-money calls.”
SOURCE
It’s those “LEAP Options” that represent a levered bet (with a small amount of money down) that the S&P will be worth more in the future when the option closes. If it isn’t higher at that date, than the money paid for the option is wasted. But they figure that in that case their 90% weighting in Treasury bonds will profit from “flight to quality” and compensate them for the losses on the call options.
I hope this is 75% correct. It’s a bit complicated to me. While “defensive” in nature (compared to putting 100% of your money into stocks) it’s also net-net a “bullish” market call. Some sources I follow have been pointing out for quite a while that there’s an unusually large amount of money being invested in these types of vehicles - enough that they may not be a timely / prudent investment at present. And, possibly, they may add to any downside market volatility.

Optimism on an off day:
https://usfunds.com/resource/3-charts-im-thankful-for-this-week

Don’t know what REMIX is about - but a number of financial outlets, including Barron’s, have commented lately that the futures markets were overextended. While futures contracts can be used to hedge risk, they also represent a bullish bet from what I’ve been able to read. A lot of funds using futures got hit today. TAIL (which I own) which hedges with puts (seen as more bearish) did OK. Of course, all these gimmick funds are risky longer term.
The inflation hedges, like miners, were whacked hard today. In the oil sector, both NYMEX & BRENT were down over 6%. Not much was spared that I can see. Real Estate & Utilities both hit hard - even as interest rates fell.
Cheer up. I believe this underperformance on the inflation hedges to be only “transitory.” :)
-
For the benefit of mfo members, here’s how some hedge-type funds on my watch list performed today:
SWAN -0.28%
HEGD -1.83%
DOG +2.47%
NUSI -1.25%
DRSK +0.14%
SPDN +2.26%
FTLS -1.84%
DFND -0.10%
TAIL (owned) +2.80%
A couple mutual funds that are more broadly diversified than the above, but which employ some hedging techniques:
HSGFX +2.44%
TMSRX (owned) -0.47%

(November 24) “Today I sold one, NGLOY, after a quick 14% run-up since they recommended it roughly 2 months ago. Still like it - but have been trimming risk wherever I can of late.”

NGLOY lost 7.54% today.
Edit 11/27 (To be completely honest here) I moved the proceeds from NGLOY into an existing holding, GLFOX. It lost about 2.4% yesterday - so am only two thirds as smart (or lucky) as might at first appear. :)

Copied from the Big Bang Investing Board ... Investment Insights Section ... for posting on the MFO Board.
This briefing is for the week ending November 26, 2021.
The Index Review
For the week the major equity indices finished down. The Dow Jones Industrial Average gave back -2.71%%. the S&P 500 Stock Index declined -2.34%, the Nasdaq Composite retreated -3.14% while the Russell 2000 Small Cap Index lost -4.98%. The three best performing major equity sectors for the week were utilities -0.24%, consumer defensive -0.48%, and health care -1.35%. The widely followed S&P 500 Index closed the week with a dividend yield of 1.29% and is up year to date 22.33%; but off its 52 week high by -3.08%. The widely followed US Aggregate Bond ETF (AGG) was listed with a yield of 1.82% and for the week and lost -0.46%. Year to date AGG has had a negative total returned of -2.26% and is off its 52 week high by -3.32%.
Global Equity Compass: For the week my three best performers in my global equity compass were EWZ (Brazil) +0.79%, SPY (US S&P 500) -2.29%, and QQQ (US Nasdaq QQQ) -1.95%.
Fixed Income Compass: For the week my three best performers in my fixed income compass were TLT (20+Year US Treasury Bond) +2.53%, IEF (7 to 10 Year US Treasury Bond) +0.72% and AGG (US Agg Bond) +0.25%.
Commodity Compass: For the week my three best performers in my commodity compass were UNG (Natural Gas) +6.54%, DBA (Agriculture) -0.25% and GLD (Gold) -4.08%.
Producer Compass: For the week my three best performers in my producer compass were REMX (Rare Earth Metals) +3.75%, SLX (Steel) +0.60% and LIT (Global Lithium) -0.93%.
Currency Compass: For the week my three best performers in my currency compass were FXY (Japanese Yen) +1.05%, UUP (US Dollar Bullish) +0.59%, and FXF (Swiss Frank) +0.24%.
A Blurb About Old_Skeet's Portfolio: Currently, Old_Skeet is a little underweight fixed income due to anticipated rising interest rates and a little overweight equity due to a seasonal stock trend via a special investment position (spiff). In the fall I generally increase my equity weighting and towards the end of spring I trim, or close, my special investment position. As I write, the equity spiff that I opened back in September, during a stock market dip, is up 3.42%.
Articles of Investment Interest
Wall St Week Ahead COVID-19 Fears Reappear As a Threat to Market
https://www.reuters.com/markets/europe/wall-st-week-ahead-covid-19-fears-reappear-threat-market-2021-11-26/
Best Money Market Mutual Funds Of 2021
https://www.forbes.com/advisor/investing/the-best-money-market-mutual-funds/
Old_Skeet's Favored Reference Links
Stock Proxy S&P 500 Index ETF (SPY)
Short Volume SPY ... https://nakedshortreport.com/company/SPY
Breadth Reading SPY ... https://stockcharts.com/h-sc/ui?s=$SPXA50R&p=D&b=5&g=0&id=p25768973625
SPY Price Chart, Elder Ray System ... https://stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p20881173280
T/A Opinion, SPY ... https://www.barchart.com/etfs-funds/quotes/SPY/opinion
Bond Proxy Aggregate Bond ETF (AGG)
Short Volume AGG ... https://nakedshortreport.com/company/AGG
Yield Charting AGG ... https://stockcharts.com/h-sc/ui?s=!YLDSPX&p=D&b=5&g=0&id=p75520805591
AGG Price Chart, Elder Ray System ... https://stockcharts.com/h-sc/ui?s=AGG&p=D&b=5&g=0&id=p07044822535
T/A Opinion, AGG ... https://www.barchart.com/etfs-funds/quotes/AGG/opinion
Thanks for stopping by and reading; and, I wish all "Good Investing."

So much for using Futures to diversify. Not looking for THAT kind of volatility. Commodities got slammed today, which is going to happen occasionally after a run-up.
REMIX is off the list.
On the opposite end, CTFAX actually gained +.26%, as bonds had a great day overall.

@bee - Thanks.
Obviously something is screwed up there. Note that for 1 year the fund ranks 25th among its peer group, while for 3 years it ranks much better - 7th. So I’ll guess they haven’t updated their numbers on the chart you pasted to reflect the current year’s lackluster performance.
However, if the fund’s potential “worst case” downside really is 65% as they claim, I’d suggest not buying it. Such a disastrous year would leave only 35% of the fund’ value remaining. Seems to me like you’d have to earn nearly 200% on that meager sum to get back to break-even the following year.
-
Added - I didn’t intend to recommend Ferris’ site. It’s just one of several I click on from time to time for a wide variety of views. Morningstar and Lipper are also helpful for broad overviews. For specific fund holdings and year-to year-performance it’s hard to top Yahoo. I buy very few new funds. Usually put candidates on a watch list and monitor for at least a few months before buying. MaxFunds seems to be the most critical in its assessments - for whatever reason.