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If you expect alternative funds to reposition themselves suddenly in order to take advantage of a 4-5% drop, you are going to be disappointed with a lot of L/S funds that are already mostly long. These aren't hedge funds and they aren't going to be that nimble. If this volatility lasts through the end of the year, then it becomes how do these funds fare after 3-6 month period of volatility.
I will say, despite my reluctance to be in anything Pimco, I'm rather fascinated by the performance of their new Managed Futures fund, which has actually done better this year than one of the largest managed futures hedge funds and has had performance that is vastly superior to the category.
@scott, are you referring to the 130/30 funds which are typically leveraged for returns?
I guess the idea is more that I would not expect a long/short fund to change - or be nimble enough - to take advantage of a 4-5% correction. A mutual fund isn't going to change in dramatic fashion because of what has happened over the last week, in other words. If this lasts months, then you may see movement and then you can look at results. It's just too short-term at this point to - I think - see major shifts in a fund's allocation.
As for the Managed Futures category, which has not done well broadly over the last few years but is something I'd not expect a moonshot from on a good year, to have a fund like Pimco's new one get double digit returns and be ahead of the category by more than 10% is certainly compelling, although the fund's prospectus language is very broad and doesn't give me a sense of the difference in this fund vs other MF funds. I will say that the Pimco fund has outperformed a large managed futures hedge fund - whether or not that continues, who knows - but I find it rather impressive.
@JohnChisum I hold a position in the PIMCO Managed Futures fund PQTDX I haven't read or heard anything about PIMCO that would persuade me to sell or reduce this holding. But, aside from PIMCO, managed futures aren't for everyone.
Bill Gross departed PIMCO two weeks ago and, for my purposes, life goes on.
Let me clarify what I meant by "monitor". I'm trying to ask questions to myself and answer them to see if these are candidates worthy of purchase. I already own some of these, so it makes sense to go see what you thought about the fund doing for you and whether you screwed up .
For example, I've been toying with RNBWX. So today I'm asking myself this question: How does a fund with 3 quarters of its assets in cash, strategy of using options for protection, still happen to drop 1.36% yesterday?
Another example. LSOFX. Is this simply another fund like CGMFX, which except for trading more frequently, is simply making upside and downside bets, instead of actually managing risk in any meaningful way. In other words, is this simply another fund like which can screw up on the long positions AND short positions and actually end up performing worse than any long only or short only fund? With 1 third of assets in cash it still managed to lose 2% yesterday.
Finally, are funds like TFSMX, WMCNX, WBMAX, etc. really the kind of funds you want to be invested in rather than PMHDX or ARLSX or RLSFX?
I wouldn't sell anything Pimco right now. They are better off IMO.
My question regarding long-short funds was dealing with the fact that there are many variations of the funds. I hold ACDJX which is 130/30 but uses the short side to leverage returns. I don't expect this type of fund to hold up well in a bear scenario and it's one fund I am eyeing to move out of. I've had good success with it. I'm more into the bond side for protection but with the bond market looking topsy, the unconstrained funds are one choice besides short term govt.
We haven't gone down ten percent yet which has been a general trigger for me. Lately I've been sweeping profits. I have a feeling things might get worse here but I've been wrong many times before. It's all part of the game.
If you sort on Risk, top performers rise to top...interesting...Litman Gregory Master Alt Strats In (MASFX), RiverPark Structural Alpha Institut (RSAIX), Ironclad Managed Risk (IRONX), and Robeco Boston Partners L/S Rsrch In (BPIRX).
I guess this one is similar to SWHEX too. Notice I left HSGFX out which I own. Funds that simply invest and hedge exposure I left out. To me they are not "alternative". I mean even FPACX and CGMFX take short positions, and I am not looking at them that way either.
Not to say RGHVX should 't be worthy of consideration otherwise.
If you sort on Risk, top performers rise to top...interesting...Litman Gregory Master Alt Strats In (MASFX), RiverPark Structural Alpha Institut (RSAIX), Ironclad Managed Risk (IRONX), and Robeco Boston Partners L/S Rsrch In (BPIRX).
Thank you Charles! I keep forgetting this feature you added.
@VintageFreak My responsibility-to-others plate is a bit overflowing right now so can't help; but if you're willing to put in the time and work, I promise to read and thoroughly consider everything you report. Maybe something pops out and warrants deeper drilling. Sure, go for it, why not? An excellent idea--- a like-y face and three thumbs up!
I will say, despite my reluctance to be in anything Pimco, I'm rather fascinated by the performance of their new Managed Futures fund, which has actually done better this year than one of the largest managed futures hedge funds and has had performance that is vastly superior to the category.
Actually Arnott is being added to all "fundamental" funds I believe. I have added one fund that has a good record PFSDX to the list.
Comments
I will say, despite my reluctance to be in anything Pimco, I'm rather fascinated by the performance of their new Managed Futures fund, which has actually done better this year than one of the largest managed futures hedge funds and has had performance that is vastly superior to the category.
As for the Managed Futures category, which has not done well broadly over the last few years but is something I'd not expect a moonshot from on a good year, to have a fund like Pimco's new one get double digit returns and be ahead of the category by more than 10% is certainly compelling, although the fund's prospectus language is very broad and doesn't give me a sense of the difference in this fund vs other MF funds. I will say that the Pimco fund has outperformed a large managed futures hedge fund - whether or not that continues, who knows - but I find it rather impressive.
Bill Gross departed PIMCO two weeks ago and, for my purposes, life goes on.
For example, I've been toying with RNBWX. So today I'm asking myself this question: How does a fund with 3 quarters of its assets in cash, strategy of using options for protection, still happen to drop 1.36% yesterday?
Another example. LSOFX. Is this simply another fund like CGMFX, which except for trading more frequently, is simply making upside and downside bets, instead of actually managing risk in any meaningful way. In other words, is this simply another fund like which can screw up on the long positions AND short positions and actually end up performing worse than any long only or short only fund? With 1 third of assets in cash it still managed to lose 2% yesterday.
Finally, are funds like TFSMX, WMCNX, WBMAX, etc. really the kind of funds you want to be invested in rather than PMHDX or ARLSX or RLSFX?
My question regarding long-short funds was dealing with the fact that there are many variations of the funds. I hold ACDJX which is 130/30 but uses the short side to leverage returns. I don't expect this type of fund to hold up well in a bear scenario and it's one fund I am eyeing to move out of. I've had good success with it. I'm more into the bond side for protection but with the bond market looking topsy, the unconstrained funds are one choice besides short term govt.
We haven't gone down ten percent yet which has been a general trigger for me. Lately I've been sweeping profits. I have a feeling things might get worse here but I've been wrong many times before. It's all part of the game.
http://www.mutualfundobserver.com/fund-ratings/?symbol=+BPRRX+BGRSX+ARLSX+RLSFX+RSAFX+LSOFX+WBMAX+WBLSX+TFSMX+TFSSX+PMHDX+WMCNX+IRONX+NLSAX+NABAX+OTCRX+MASNX+RNBWX&submit=Submit
If you sort on Risk, top performers rise to top...interesting...Litman Gregory Master Alt Strats In (MASFX), RiverPark Structural Alpha Institut (RSAIX), Ironclad Managed Risk (IRONX), and Robeco Boston Partners L/S Rsrch In (BPIRX).
Not to say RGHVX should 't be worthy of consideration otherwise.
My responsibility-to-others plate is a bit overflowing right now so can't help; but if you're willing to put in the time and work, I promise to read and thoroughly consider everything you report. Maybe something pops out and warrants deeper drilling. Sure, go for it, why not?
An excellent idea--- a like-y face and three thumbs up!