Manager David Sherman of Cohanzick Asset Management and RiverPark’s president, Morty Schaja, have generously agreed to participate in a conference call with Observer readers. I’ll moderate the call and David will field questions on the fund’s strategies and prospects. The call is September 13 at 7:00 p.m., Eastern.
You can register for the conference by navigating to
http://services.choruscall.com/diamondpass/registration?confirmationNumber=10017662 and following the prompts.
If you’ve got questions, feel free to write me or post a query on the discussion board. I'll be especially grateful for the presence of anyone who actually
understands fixed-income securities. I do my best to follow along, but there are times when I feel distinctly out of my depth. I'll moderate the call, which mostly means that I'll start with the two obvious questions: how bad can the downside get and how are changes in the market affecting your ability to continue finding funds?
Feel free to drop by and lurk or, better yet, to follow up on some of the comments in the Dow Jones article or our earlier discussions.
As a side note, David is very bright, very approachable and very excited about bond investing. I think you'll like him and may even be able to learn something interesting and useful.
For what it's worth,
David
Comments
I also want to ask about their fees. Due to the stable NAV, it is very easy to see the impact of the fees on my expected yield (maybe this is unfortunate for the manager). I think RPHYX currently has a fee waiver in place to keep expenses at 1.25%. However 1.25% still seems relatively high compared to other bond funds. Are they close to eliminating the need for the fee waiver and/or reducing their fees in the future?
Lastly a technical question: Will a recording and/or transcript be available for those who can't make the call?
Looking forward to the discussion.
The Dow Jones article contributes to the discussion of your first question and I'll be happy to raise it.
The second question strikes me as entirely sensible and, likely, Schaja's call.
And yes. They'll have a recording of the call to which we'll link. The calling service seems to suggest that the recording will be available online for 60 days, but I suppose if RiverPark mounts it on their site it could last longer.
Looking forward to sharing the time with you,
David
I've noticed some recent news reports about new bond trading platforms from Goldman, Blackrock, etc. (see here, here and here). What is David's view of these new platforms? Does Cohanzick use (or plan to use) these new platforms and do they affect the strategy or competition at all?
Also, since a primary appeal of RPHYX is its relatively stable NAV, could David walk us through their pricing for the past few days so we can better understand the downside risk and why the NAV fluctuates the way it does. On Aug 31, the NAV dropped two cents per share with the monthly dividend -- this I understand. It increased a cent on Sept 6 -- I understand the NAV will generally increase slowly during the month as the bonds approach their call date or are actually redeemed. However on Sept 7 and 8, the NAV dropped one cent each day -- what does this correspond to? Was there an increased default risk with some of the holdings, or was there a new investment in an undervalued security, or simply just a quirk in trading prices those days? Then on Sept 11, the NAV immediately rebounded back 2 cents to its former level. (I am not necessarily looking for an explanation for these specific days, just some idea as to what typically causes these fluctuations during the course of the month.)
I'd like to hear other folks' questions as well, so please don't feel obliged to raise all of these if there are other questions waiting.
Unfortunately, 7pm is when I commute home and won't be able to call in from public transportation.
1) How do you foresee rising interest rates affecting the fund?
2) What is your cash balance today and its % of the fund, and if your AUM rises, do you have readily available places to invest so as to not dilute current shareholder profits? Or are you unable to do deals because of a lack of cash?
3) In parallel to question 2, are you the 'go to' fund for these orphaned securities, and who is or will be your competition? What are the limits in the market for this fund?
4) What other strategies are available for you to explore?
I really like this fund and look forward to investing more funds in it. Thanks David, for the good work you have put into this. Gary
David