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RiverPark Short Term High Yield Fund to reopen to new investors
"I'm looking at the 5-year tax adjusted returns for RPHYX and it's 1.40%. Three years is 0.90%. "
Okay, but what are you saying? That this is better than cash, or that it's worse than more volatile funds?
I wasn't saying anything other than what was stated - the numbers provided by *M. People can make their own conclusions based on the numbers. Taxes may play a part in returns so I think it's important to keep that in mind, especially for those holding these types of funds in taxable accounts.
I own this, but worry that in the next GFC it may end up like those ultrashort bond funds that cratered, revealing that there was no free lunch: the extra 100-200 bp of return at year came at a risk, at least during a major crash. I do feel like the manager here is smarter and more careful than most of the managers there were, but the only true cash equivalent is cash.
@VintageFreak If you look back at David's original write-up, that strategy is supposed to be 1/3 of the portfolio, if conditions are right, and it's not zero risk. Some of these junk bond issuers could go bankrupt in those 30 days, it depends on the manager's research to reduce that risk.
The fund has shown occasional (small) losses for a quarter, which should be impossible if all its bonds are due in no more than 30 days and all pay up.
I like the fund and I expect it to perform as intended, except maybe in a massive crisis as in 2008 -- but that, of course, is when you most want safety.
"The fund has shown occasional (small) losses for a quarter, which should be impossible if all its bonds are due in no more than 30 days and all pay up."
Say you own an FDIC-insured CD maturing in 30 days, but (to quote JG Wentworth) "you need it NOW".
Your CD might allow an early withdrawal, but you'd pay a penalty. Or it might be a brokered CD and you could sell it, but again you'd take a haircut.
Being able to get your money in a month doesn't mean that shareholders can get their money now without causing a hit to the NAV. Not unless you add the assumption that the bonds mature on a daily basis in amounts adequate to meet daily redemptions, or that the fund keeps a 30 day cash buffer.
You're correct that RPHYX pursues multiple strategies but I don't think you can prove this with logic alone, i.e. that the NAV could not possibly fall if it only used the single "exceedingly short-term" maturity strategy.
BTW, "exceedingly short-term" was the phrase David used, along with "think 30-90 day maturity". Not 30 days.
When I was looking for a cash substitute for my bucket 1 holdings, RPHYX was closed. From the Great Owl listings, SSTHX has filled in admirably for me, is NTF at Schwab, and has served its purpose well.
Nothing is zero risk. Wells Fargo funds shouldn't be bought on first principles.
Take a look at SIRIX and SSIIX. ER is very high, but these guys seem to be navigating portfolio well and do actively focus on capital preservation. I've had SIRIX in my IRA for a while along with RPHYX and RSIVX.
Comments
The fund has shown occasional (small) losses for a quarter, which should be impossible if all its bonds are due in no more than 30 days and all pay up.
I like the fund and I expect it to perform as intended, except maybe in a massive crisis as in 2008 -- but that, of course, is when you most want safety.
Say you own an FDIC-insured CD maturing in 30 days, but (to quote JG Wentworth) "you need it NOW".
Your CD might allow an early withdrawal, but you'd pay a penalty. Or it might be a brokered CD and you could sell it, but again you'd take a haircut.
Being able to get your money in a month doesn't mean that shareholders can get their money now without causing a hit to the NAV. Not unless you add the assumption that the bonds mature on a daily basis in amounts adequate to meet daily redemptions, or that the fund keeps a 30 day cash buffer.
You're correct that RPHYX pursues multiple strategies but I don't think you can prove this with logic alone, i.e. that the NAV could not possibly fall if it only used the single "exceedingly short-term" maturity strategy.
BTW, "exceedingly short-term" was the phrase David used, along with "think 30-90 day maturity". Not 30 days.
Take a look at SIRIX and SSIIX. ER is very high, but these guys seem to be navigating portfolio well and do actively focus on capital preservation. I've had SIRIX in my IRA for a while along with RPHYX and RSIVX.