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Can we hope FSAHX is in the mould of RPHYX or RSIVX? Would love to hear knowledgeable people comment. Always good to know of lowest risk alternatives to MM funds given current interest rate environment. Good to know options for spreading manager risk for such holdings.
If anyone has any insight it will be much appreciated.
Always good to know of lowest risk alternatives to MM funds given current interest rate environment. Good to know options for spreading manager risk for such holdings.
Thanks a bunch rjb. But if you look at the numbers for RPHYX you will also see high numbers against BB and B. Now obviously the duration for RPHYX may be much smaller. It is only when I saw that I was intrigued and wanted to know if the similarity stops there or if the intent is the same with both funds.
Well, one of the premises of RPHYX is that they buy stuff that has either already been called, or is of very short duration to call, so they are not really that concerned about the market value of the bond itself, but are counting on collecting the full face value in a very short period of time. Theoretically at least that should make their stuff pretty resistant to the bear. The main risk is that the bond issuer could go bankrupt before repayment, but they do a pretty good risk analysis to make that sort of thing highly improbable.
If you are looking for a cash substitute type fund, the fund David just highlighted in his commentary, ZEOIX, fits the bill. It appears to be even more conservative then short term HY funds like RPHYX. I'm considering it myself.
They describe themselves as a home for your “strategic cash holdings, with the goals of protecting principal and beating inflation by an attractive margin.” While the prospectus allows a wide range of investments, the core of the portfolio has been short-term high yield bonds, secured floating rate loans and cash.
Coincidently, American Century has two funds opening in a week. Strategic Income and Short Duration Strategic Income. I can get in at the open. I'm waiting on the prospectus at the moment.
@JohnChisum: You can avoid the front-load with LDLAX, a higher ER, and if kept for a year the deferred load disappears. It also pays dividend monthly Regards, Ted
Coincidently, American Century has two funds opening in a week. Strategic Income and Short Duration Strategic Income. I can get in at the open. I'm waiting on the prospectus at the moment.
I'm not too sure about American Century. I closed my account with them. I owned ASIOX. I might buy that fund at a brokerage, but I don't see myself keeping an account with them. I have a smattering of their Equity Income in one 401k, rest everything is in index funds.
Comments
Best.
Regards,
Ted
Coincidently, American Century has two funds opening in a week. Strategic Income and Short Duration Strategic Income. I can get in at the open. I'm waiting on the prospectus at the moment.
Regards,
Ted