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Of course its the portfolio manager choice but can't help thinking off the top of my head, is it a wise way to go? I won't invest in Marketfield as not comfortable with their approach to short positions. Just my opinion.
I must confess, I'm not happy now that I realize (at least, assume) what they've done here. And the required 6 mos. holding period means I'm stuck with my mistake.
Reply to @JoeNoEskimo: They've been betting against gold and silver for a fair while using futures and I believe some individual names, but I think those bets may have been increased - I don't remember Central Fund of Canada (CEF) short being among the top 25 holdings.
Marketfield is a long-term holding for me, but I'm starting to take some profits and move to things that haven't done well (natural resources-related) and have started a small position in Pimco's new Long/Short fund, which I find interesting and different enough from Marketfield's macro/multi-asset long/short strategy.
I have confidence in Marketfield's management to move if they're wrong, but for me it was/is a sizable holding and I think rather than continuing to have it as a hedge-of-sorts (or, a "highly flexible second opinion" that goes against some of my big picture views) given its macro views, I'm starting to diversify out of it a little, especially if the fund is going to press some of its short bets further at this point.
I do find Marketfield's shorts of Utilities and EM Bonds to be interesting given the desire for yield, which I think could go on potentially for multiple years, and if they're short, they're paying the dividends.
Just to add: the fund was short 99,000 shares of Central Fund of Canada (CEF, which is gold and silver holdings) as of September 30, 2011. It is now short (as of 3/30/12), a bit over 1.2M shares.
Reply to @VintageFreak: There is no way to gain an exact conclusion, as there's no way to view to-the-minute holdings. However, while the fund has held up exceedingly (and consistently) well in comparison to the market for the last couple of weeks since this downturn has started, I find the sudden down days once gold has ramped potentially indicative of a gold short that was already large and - given management's views on gold and silver - may have either been added to or is simply enough to cause a noticeable effect on performance. Again, I'm not selling the fund, but rather than continue to have something largely negative on metals and EM that looks to continue to be, I'm diversifying away somewhat from what was a fairly large holding.
While you're right that there's no way of knowing for sure, I think this chart of recent fund performance is kinda interesting.
Reply to @scott: Thanks for the insight Scott. I started buying this fund as a replacement for the lame NARFX (now SARIX). Glad I did. Now I need to sell SARIX which I will this year.
I recall there was also a long position in a Mexico ETF in the top 25 holdings, which has now disappeared. I think that was the only macro-ish ex-U.S. long position of any kind in the portfolio last reporting period.
I'm still mildly interested in MFLDX, just in watch status at this point -- thinking of it as a stock fund equivalent rather than an alternative asset.
My view is you cannot argue with results. It has signifcantly outperformed the S&P 500 and long/short funds trailing returns as described by Morningstar data over several periods. It has been in the top 10th percentile for long/short funds from 1 month all the way to the 3 year trailing period. Why should the managers necessarily be doubted now? One might be uncomfortable with the managers shorting gold/silver and EM, but that may be the appeal of the fund. It makes contrarian bets, those that we might be afraid to do ourselves, and they have worked. In my case, it looks like a good counterbalance to my EM, foreign bond, and commodity exposure.
Scott, I have been interested in Pimco's new long/short fund also, but it is 82% long and only 3% short. Because it is new it may evolve, or maybe the manager currently sees more long opportunites than short and will adjust when he thinks conditions warrant, but right now it looks less like a long/short fund, and more like a long fund that has the ability to do some shorting.
Reply to @VintageFreak: Happy to help, and again, there's no way to know exactly/know extent, but the fund does seem to be at least lightly/mildly correlated to precious metals movements, especially in the last couple of weeks. I am keeping MFLDX, certainly, 'twas just a large position and am bringing it down a bit. SARIX unfortunately has not performed as well as hoped since the change, but it is quite a change - definitely a very different fund than when it was NARFX.
Reply to @Chinfist: I agree with you. It's not a matter of being uncomfortable, as Marketfield has been a hedge-of-sorts (a "flexible second opinion") that goes against some of my views and holdings. However, it's a large position for me, it's done well, and it looks as if it's continuing to press the same bets further that have done well and I think continuing to press a bet against precious metals at this point is not something I want as much exposure to. I'm definitely not going to sell it all, but it's to the point where I'm looking to take a bit of profit and move to some other things.
I've started a small position in Pimco's fund (which is listed as "long-biased"), whose global scope and concentrated nature (as well as relatively good prior record, although past results are not an indicator of future performance, yadda yadda) I found interesting. I will wait for a while before adding more. Having it be less disappointing than a couple of Pimco's other new stock funds (particularly the EM fund which has done "bleep"-y) will not be difficult, so expectations aren't tremendously high.
As I have mentioned more than a few times before, we like MFLDX precisely because it takes some positions that are different from our longer-term views. For example, we believe EM stocks and bonds offer perhaps the best long-term potential. But MFLDX takes a much more current viewpoint, one that says EMs are (mostly) in recession or nearing recession. Manager Michael Aronstein is not afraid to take some pretty strong short positions (shorting CEF, which is something owned in many of our client accounts). That's just fine with us, since the fund has helped our portfolios to reduce overall volatility. Of course, he is not right all the time. But he has a lot more experience in these kinds of sector and economic bets than I do, and the success is evident from his long-term results.
Comments
Its no wonder the MF industry is losing assets.
Marketfield is a long-term holding for me, but I'm starting to take some profits and move to things that haven't done well (natural resources-related) and have started a small position in Pimco's new Long/Short fund, which I find interesting and different enough from Marketfield's macro/multi-asset long/short strategy.
I have confidence in Marketfield's management to move if they're wrong, but for me it was/is a sizable holding and I think rather than continuing to have it as a hedge-of-sorts (or, a "highly flexible second opinion" that goes against some of my big picture views) given its macro views, I'm starting to diversify out of it a little, especially if the fund is going to press some of its short bets further at this point.
I do find Marketfield's shorts of Utilities and EM Bonds to be interesting given the desire for yield, which I think could go on potentially for multiple years, and if they're short, they're paying the dividends.
Just to add: the fund was short 99,000 shares of Central Fund of Canada (CEF, which is gold and silver holdings) as of September 30, 2011. It is now short (as of 3/30/12), a bit over 1.2M shares.
While you're right that there's no way of knowing for sure, I think this chart of recent fund performance is kinda interesting.
http://finance.yahoo.com/echarts?s=MFLDX+Interactive#symbol=mfldx;range=20120511,20120517;compare=gld+^gspc;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
I'm still mildly interested in MFLDX, just in watch status at this point -- thinking of it as a stock fund equivalent rather than an alternative asset.
Scott, I have been interested in Pimco's new long/short fund also, but it is 82% long and only 3% short. Because it is new it may evolve, or maybe the manager currently sees more long opportunites than short and will adjust when he thinks conditions warrant, but right now it looks less like a long/short fund, and more like a long fund that has the ability to do some shorting.
I've started a small position in Pimco's fund (which is listed as "long-biased"), whose global scope and concentrated nature (as well as relatively good prior record, although past results are not an indicator of future performance, yadda yadda) I found interesting. I will wait for a while before adding more. Having it be less disappointing than a couple of Pimco's other new stock funds (particularly the EM fund which has done "bleep"-y) will not be difficult, so expectations aren't tremendously high.