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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.

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A brilliant fund that never rises

A mind is a terrible thing to waste. As an investment--- even worse. But Andrew Lo has proven all doubters wrong. Never ever say never ever.... a "cautionary tale."

http://www.thereformedbroker.com/2014/05/28/brokers-liquid-alts-and-the-fund-that-never-goes-up/

Comments

  • edited May 2014
    While it's not described as such (and oddly, not in that category on M*), this would appear to be simply a managed futures fund and not a real great one. The last few years have not been that great for managed futures as a strategy, but - as I've discussed in past threads - I really don't think managed futures works in the mutual fund format.

    Really just sort of an "it is what it is".
  • That chart is one for the ages.

    I think I'm recalling right that Consuelo Mack never asked Andrew L. about his record on the alt strategy he was touting during the May 2 WealthTrack program.
  • AndyJ said:

    That chart is one for the ages.

    I think I'm recalling right that Consuelo Mack never asked Andrew L. about his record on the alt strategy he was touting during the May 2 WealthTrack program.

    No financial media ever questions guests. CNBC never questions Gartman (whose Canadian ETF was down substantially over the last few years until it closed) or anyone else.

  • scott said:

    While it's not described as such (and oddly, not in that category on M*), this would appear to be simply a managed futures fund and not a real great one. The last few years have not been that great for managed futures as a strategy, but - as I've discussed in past threads - I really don't think managed futures works in the mutual fund format.

    Really just sort of an "it is what it is".

    PQTIX has been working well so far.
  • AndyJ said:

    That chart is one for the ages.

    I think I'm recalling right that Consuelo Mack never asked Andrew L. about his record on the alt strategy he was touting during the May 2 WealthTrack program.

    +++++
    I saw the Consuelo Mack interview, and no, I don't recall him being asked his record. I should say though, I'm a big fan of Consuelo Mack.....

    But he was asked something that Consuelo Mack asks all her guests: Something to the effect of

    'What is the one investment you would recommend for nearly all portfolios?'

    IIRC, Andrew Low said that almost all portfolios should have 5-20% of the assets in managed futures. [He might have said liquid alternatives, but my recollection is that he said managed futures].

    I was stunned by that recommendation. Later I spent a few minutes reading about his fund and about managed futures. How could you possibly put 20% of your portfolio in an investment that you couldn't explain in simple, understandable terms? Like investing in a black box, shrouded in mystery.
  • Chinfist said:

    scott said:

    While it's not described as such (and oddly, not in that category on M*), this would appear to be simply a managed futures fund and not a real great one. The last few years have not been that great for managed futures as a strategy, but - as I've discussed in past threads - I really don't think managed futures works in the mutual fund format.

    Really just sort of an "it is what it is".

    PQTIX has been working well so far.
    It actually has. I'll have to take a look at the holdings when it is released.

    "IIRC, Andrew Low said that almost all portfolios should have 5-20% of the assets in managed futures. [He might have said liquid alternatives, but my recollection is that he said managed futures]."

    I have nothing against managed futures, which is often some degree of trend following long or short, but 20% is insane, especially the kind of managed futures MFs, most of which update maybe once a month and then are consistently whipsawed. While I recommend alternatives, I really don't think there's a need for managed futures for mutual fund holders. There are some good managed futures hedge funds that have far more infrastructure and can be far more nimble.

    Take a look at RYMFX, the first managed futures fund. It was one of the few things that was up in 2008, then afterwards - aside from a little comeback lately - has just been drifting lower.

    The AQR fund has certainly done better, but overall is down slightly since inception in 2010.

    http://finance.yahoo.com/echarts?s=RYMFX+Interactive#symbol=RYMFX;range=my

    The new Pimco fund has certainly had a good start, but I just think the strategy is going to have periods when it works and periods when it doesn't.
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