David and colleagues decided to publish an entire encyclopedia on investing this month. Packed full of graphs, charts and analysis with the ambitious goal of assessing relative risk / reward for many different approaches (emphasis on risk). Some “
end of the world” investment ideas are suggested, playing off the global warming theme. Everybody seems to agree that oil as an investment is in its death-throes. (I’ll submit that sometimes the consensus is wrong.) Charles Lynn Bolin offers a fascinating look at the
bucket approach, which he uses. Personally, I never met a pie-chart I didn’t like, which I believe ties-in nicely in planning a bucket approach. Bucketing should ring a bell with Ol’ Skeet and many others here who use it - perhaps under a different name (like
sleeves).
One fund David looks at is RPIEX - Price’s Global Dynamic Bond fund. Dang it. I thought about that one some time back, but it was in the dumpster than. I even posted on the board and we all (?) agreed it had the characteristics of a perennial loser. Guess what? The fund has come alive and posted some nice YTD returns. David also re-examines RPHYX as a cash alternative. There’s more market neutral and alternative type offerings detailed by David and team than you can shake a finger at. I once owned Calimos’ version. High fees and poor performance than.
Sorry I haven’t digested much of the commentary. I will in time. Right now it’s time to crank up the mower and tackle some 8” tall grass. My everlasting gratitude to David and the team at
mfo for these timely incisive monthly reports.
Link to August 1, 2020
Commentary:
https://www.mutualfundobserver.com/2020/08/august-1-2020/
Comments
If some one could fill in a couple of blanks it would be deeply appreciated.
1. When will this coupling start ?
2 Will holdings roll over or cash from FPPTX ?
Thanks for your time, Derf
The combination is supposed to be complete in the fourth quarter 2020. There will not be any sizeable capital gains distributions as the FPPTX is in a CG loss position according to M*. Have not seen any new SEC filings yet.
FPPTX is less than double the size of total AUM ($200 million) larger than QRSVX ($132 million). Keeping the "I" shares will be interesting. Can I exchange money into other FPA "I" funds?
I will post any filings as they come up.
Derf
My title - “What’s a bond fund like this doing in T Rowe’s stable?“
Final comment (by @Crash) - “Ya, a loser like that is a rare exception in TRP. Glad I read this thread.
To everyone who may have been misled - I’m sorry.
It will be interesting to see what rules are added for these shares. A few fund families (e.g. Grandeur Peak) sell both institutional and retail class shares with the same minimums. If that's what FPA winds up doing, exchanging institutional shares from one fund to another would not seem to be an issue.
Then there are funds like the former Salomon Bros. funds. I have a few shares of one of these funds, gifted to me years ago. After changing hands many times (through Smith Barney, Citicorp, Legg Mason) they're now branded Franklin. Along the way, share classes were added and the legacy shares "upgraded" to O class and then merged into I class. I was originally told that I could transfer shares into the same share class of any fund, regardless of min. Later, that was changed so that I was required to meet the 7 figure min.
The last time I checked with Legg Mason, they wouldn't even allow me to transfer the account to a brokerage (unless I had millions of dollars in the account).
Fund company rules for legacy shares range from the sublime to the ridiculous. I hope FPA is reasonable.
I always want to keep my options available for possible opportunities. Sterling Capital allowed Stratton Fund investors to open other "I" share class accounts once the Stratton accounts were consolidated under Sterling Capital moniker. A couple of exchanges from my rebranded Stratton fund allowed me to purchase "I" share class of Sterling Capital's Special Opportunities and Equity Income funds.
If I remember correctly, Bridgeway Large Cap Value and Large Cap Growth funds were sold to American Beacon using their moniker (still managed by Bridgeway); however, you could not do an exchange of money from the American Beacon Bridgeway Large Cap Value or Large Cap Growth fund "I" share class into other American Beacon funds to receive their "I" share class equivalent.
https://www.sec.gov/Archives/edgar/data/916006/000119312511312700/d256598d497.htm (Bridgeway Large Cap Value reorganization).
https://www.sec.gov/Archives/edgar/data/916006/000119312516453235/d125121d497.htm (Bridgeway Large Cap Growth reorganization)
American Beacon funds prospectus excerpt:
https://www.sec.gov/Archives/edgar/data/809593/000113322820001973/abf-html2217_485bpos.htm#chapter_5-sect1_2_2037
Exchange Policies
...The eligibility and minimum investment requirement must be met for the class into which the shareholder is exchanging. Fund shares may be acquired through exchange only in U.S. states and Territories in which they can be legally sold. Each Fund reserves the right to charge a fee and to modify or terminate the exchange privilege at any time. Each Fund reserves the right to refuse exchange requests if, in the judgment of a Fund, the transaction would adversely affect a Fund and its shareholders. Please refer to the section titled "Frequent Trading and Market Timing" for information on the Funds' policies regarding frequent purchases, redemptions, and exchanges.
It is possible that FPA may introduce a "I" share class of the Crescent fund. FPA plans to offer a "supra" institutional class of the Crescent fund which has an extremely high initial minimum:
https://www.sec.gov/Archives/edgar/data/924727/000110465920081174/a20-24082_1485apos.htm
Who knows what will happen with FPA once their international funds (International Value and Paramount funds) are transferred.
Unfortunately, that's often the case. Still, as you wrote, it's wise to keep your options open until there's a clear answer.
Derf