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Sell JHQAX?? Buy LCORX?

Im thinking about selling jhqax and buying lcorx, im thinking lcorx is more flexible in its asset holdings and allocation and may be a better fund to hold in this tough investing period. I would appreciate all opinions.

Comments

  • edited May 8
    I have no opinion on your question. Sorry. I’m sure others will

    But you raise the difficult question of where to invest for low risk while earning something above what short term bonds would return. Toughest I’ve ever seen it.

    I have a bit in QMN. A very low volatility etf that in the past has pulled 2 or 3% annually. Off 5% this year. I looked at CVSIX which has an excellent long term record. Off 3-4% this year. Just for the hell of it I looked at the very fine FGMNX. Way down this year and the result has to bring its once stellar 10 year return down to virtually 0. One interesting exception is CCOR - however on a day to day basis it is quite volatile. Not important to most. Oops. Double checked. That one’s down 3% YTD. With my luck, were I to buy it it would promptly turn south. Funds that invest in dividend players can do some very strange things over shorter periods.

    The bond collapse has affected all manner of funds. That’s all I can determine. And the charts all exhibit a similar “nose down” pattern which gained force perhaps a month or two ago …
  • Mortgage & GNMA funds are good for stable rate environments. But due to their negative-convexity, they don't have high upside when rates fall (re-fi go up, duration goes down), but have higher downside when rates rise (re-fi go down, duration goes up). They have spreads over Treasuries to compensate for these risks and their managers can handle these known issues to some extent.
  • edited May 8

    Mortgage & GNMA funds are good for stable rate environments. But due to their negative-convexity, they don't have high upside when rates fall (re-fi go up, duration goes down), but have higher downside when rates rise (re-fi go down, duration goes up). They have spreads over Treasuries to compensate for these risks and their managers can handle these known issues to some extent.

    FUAMX (intermediate treasury) has fared even worse than FGMNX this year (down 10%) as rates have risen. Unfortunately, it doesn’t have a very long track record. However Price has an intermediate treasury (PRTIX) with a 10 year track record. It is off nearly 10% this year and the 10 year average has fallen to 0.70%. By contrast, Price’s PRGMX has lost a percentage less this year and comes in at a 0.66% 10 year return. Not sure what the point here is except that GNMAs have been a little less devastated this year than intermediate treasuries. Tough year for high quality bonds.
  • I was a long-time holder of JHQAX but sold it a couple of months ago due to its rather disappointing performance this year. I replaced the fund with PIMCO's Managed Futures fund PQTIX/PQTAX which has been performing quite well in the current market environment. Its standard deviation is a pleasing 9.1%, and YTD the fund is up 16.5%. Its 3 year total return is 15.1%.

    I have also been impressed by CDC. According to M*, 70% of this ETF's portfolio is classified as "value".

    It has exposure to high-dividend-yielding, large-cap U.S. stocks that have at least four consecutive quarters of net positive earnings.

    It offers a disciplined and balanced investment approach that manages risk by automatically reducing exposure to stocks during periods of significant market declines, and reinvests when market prices have further declined or rebound:

    YTD=2.5%
    1 YR=9.6
    3 YR=19.4
    SEC Yield=3.1%
    Std Dev=15.6

    Good luck,

    Fred
  • Managed futures funds are doing OK. Two at Fidelity which may be worth a look are PQTAX and AHLPX.
  • Impressive performance by PQTIX yesterday, gained 0.07%. S&P 500 lost 4.04%. Slept well last night.

    Fred
  • @fred495, yes hear you loud and clear...still a bit unease with the PQTIX etc...so many derivatives, futures, swap agreements, forward currency contracts....glass box? Black box?

    Sheeet hits the fan, does it all go "Poof" or are you bigly wealthier?

    Dunno.

    Best Regards,

    Baseball Fan
  • @fred495, yes hear you loud and clear...still a bit unease with the PQTIX etc...so many derivatives, futures, swap agreements, forward currency contracts....glass box? Black box?

    Sheeet hits the fan, does it all go "Poof" or are you bigly wealthier?

    Dunno.

    Best Regards,

    Baseball Fan



    For the past seven years PQTIX has done an excellent job of delivering positive returns while consistently zagging when equities zig.

    As a retired and conservative investor, I have been trying to follow the motto of another investor who once posted the following: "I don't really need a lot more money - but I certainly don't want to lose a lot. I need to remind myself to err on the side of caution."

    Until the proverbial dust settles, I have been sleeping well at night with only 10% of my portfolio in PQTIX and the rest in cash/MM.

    Good luck,

    Fred


  • Darn it, wish I had 10% in PQTIX. 18+ % YTD !
  • I have been looking at FARIX an absolute return/ Global Macro fund that FD100 mentioned on another board. They have a fair amount of useful data and information on their website. It has low correlations to Global equities (0.3) and FI (-0.3) and a 60/40 portfolio (0.3).

    For some reason Fulcrum funds are not in the MFO database, but I looked at the available absolute return funds that are and compared FARIX to the top four over the last year by MFO risk and return. FARIX has a lower St dev and a much lower Max DD ( 5%) and a higher return since inception. It is up 25% in the last three years, and 3% YTD, but only lost a smidgeon in the Covid crash. Avaliable at Schwab and Fido.

    I have been mildly burned by other "black Box" funds ( Looking at you TMSRX!) before. I tried a slug of managed futures in the past, but found they were not consistent.

    While this is really searching for the "golden fleece" ( hoping not to get fleeced) it seems worth a small nibble.



  • Not a fan of managed futures which are generally tied to commodities. My fav over the years was MBXIX, which did great in 2008-09 (similar strategy before fund launched) but cratered with the COVID dip while other strategies outperformed. My only MF play these days is an ETF just for the heck of it, KMLM, if you're going to go in, might as well go all in!
  • KMLM is an intriguing idea, @wxman123. PQTAX has the disadvantage of less flexibility than an ETF. Do you watch its trading volume and bid/ask and look for an entry point? I am familiar with trading low-volume ETFs, sometimes known as roach motels.
  • KMLM has $60MM AUM so in theory volume should be decent. That said, this is not the kind of thing I jump in and out of.
  • After I posted my query, trading volume did step up. When CAPE (now CAPD) began trading a few years ago, watching the volume was like waiting for grass seed to sprout. Now it trades robustly. On another thread, I commented on anemic volume of shares in HAPY. That’s still true. Bid and ask prices often are far apart and can lag the market. I am really surprised at the number of transparent and semi-transparent, apparently active, ETFs on offer these days. It’s surprising because an article I read this AM said most ETF volume are goes into passive strategies.
  • The new SEC rules for semitransparent ETFs were only in 09/2019 (Rule 6c-11). It took a while for fund firms to get them through the SEC approvals. Now it may seem that lots of them are coming.
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