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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Funds from Barron's, 2/20/23

REVIEW. After doing well in FY 2021 (07/2020-06/2021), university ENDOWMENTS did poorly in FY 2022 (07/2021-06/2022) (but now is 02/2023! It takes that much tome to collect data from 678 institutions). Average allocations of 30% alternatives (some not marked to market, a concern) and 28% US equity meant that they outperformed the SP500. Gifts/donations remained strong.

FUNDS. Best Fund Families are ranked based on performance in 8 fund categories and are asset-weighted.
For 2022: 1-DFA, 2-Victory, 3-Neuberger Berman, 4-Capital Group/AF, 5-JPM,…, 18-Franklin Templeton,…, 21-Vanguard,…, 23-Pimco,…, 30-Fidelity, 31-Nuveen/TIAA,…, 36-Price.
For 5 Years: 1-Fidelity, 2-MFS, 3-Putnam, 4-Mainstay, 5-Amundi US, 6-Pimco,…, 10-Neuberger Berman,…, 13-Capital Group/AF,. 14-JPM,…, 17-DFA, 18-Vanguard,…, 21-Price,…, 26-Victory, 30-Nuveen/TIAA,…, 41-Franklin Templeton.
10-year rankings and rankings within the fund categories are also provided. (Too much detail to be included here, so access Barron’s online, at newsstand, or at local library)

INCOME INVESTING. Be wary of higher-yielding EM debt, whether dollar-denominated (EMB) or in local currencies (EBND, LEMB). Many EM countries are at different stages of the rate cycle, and dollar can also have a significant impact.

FUNDS. Gibson Smith, Smith Capital (core-plus SMTRX, etc); formerly, Janus Hendersen FI-CIO (JABAX, etc). After a disastrous 2022, BONDS in 2023 are the most attractive in a decade and may remain so for 12-24 months. Money is flowing into bond funds. The FED is near the tail end of its monetary tightening (rate hikes, QT). Remember that slowing economy or recessions are good for the bond market (true for investment-grade bonds, but not for spread products, HY, EMs, etc). He doesn’t like short-term bonds – yes, yields are attractive, but for how long? He likes IT/LT bonds and a BARBELL approach. Bond volatility will remain (Treasury MOVE 110.11). For corporates, he looks at company fundamentals first, and then invest in its bonds, investment-grade or HY. He also likes MBS and CMOs.

(EXTRA) FUNDS. ETFs that are benefiting from higher rates include DIVO, DGRW, GCOW, LVHI, ROUS, TBF (short Treasuries).

https://www.barrons.com/magazine?mod=BOL_TOPNAV
https://ybbpersonalfinance.proboards.com/thread/403/barron-february-20-2023-2

Comments

  • Thanks so much for this excellent summary @yogibearbull! Really appreciate it
  • edited February 2023
    One year rankings¹ are of little value.
    Out of 49 fund families, Vanguard was ranked 21st (43rd in 2021)
    while T. Rowe Price was ranked 36th (13th in 2021) in 2022.
    The methodology used for Barron's annual Fund Families feature should be questioned
    due to large annual rating changes and eligibility requirements².



    ¹ 5-Yr and 10-Yr rankings are also included.
    ² Only 49 asset managers out of the 854 in Lipper’s database met the criteria for 2022.

  • ditto. What @MikeW said.
  • edited February 2023
    Gibson Smith is bullish on the overall bond market:
    "Thanks to the significant repricing of yields and risk assets in 2022, the bond market has returned to yield levels of 5%, 6%, 7%. The market is set up for potentially good returns over the next 12 to 24 months. We could see high-single digit, if not low-double digit-type returns across the board in fixed income if things play out as we anticipate in 2023."
  • I do hope bonds do make a turnaround this year after 2022. However, current inflation data, high service cost and strong consumer spending argue for longer rate hike than market may expected. Now they are expecting three 25 bps rate hike for the year, and that brings the terminal rate to 5.0 - 5.25%.
  • edited February 2023
    I’ll just note that (bullish) Gibson Smith manages a bond fund. :)

    Thanks Yogi. An interesting write-up. These rankings do wax and wane from year to year. Some like American (Capital Group), however, seem to defy gravity and receive top mention regularly ISTM.
  • @hank, thanks for clarifying about Gibson Smith position. Here is an article from him on bonds in general.
    https://biz.crast.net/there-are-many-bargains-on-offer-in-the-bond-market-where-to-shop/

    I don’t take one year ranking seriously either especially when the metrics seem to be opaque.

  • hank said:

    I’ll just note that (bullish) Gibson Smith manages a bond fund. :)

    Noted.
    It's possible that Mr. Smith may just be "talking his book."

  • First, recall Janus in the dot.com era. It even had an ad of a dog chasing its tail.

    Then, the go-go growth era boom had a spectacular bust.

    There were scandals.

    Many swore off Janus.

    A calmer Janus, now Janus Henderson, emerged from the ashes.

    Gibson Smith started bond operations at Janus. He was the bond CIO, managed/co-managed several bond funds and also the fixed-income portion of the hybrid JABAX.

    For a very brief time, Bill Gross was at Janus after he was unceremoniously booted out of Pimco, a firm he founded. Gross' fund at Janus did poorly.

    As owner of JABAX, I was disappointed few years ago when Gibson suddenly left Janus with a small team.

    I put JABAX on watch, but replacement FI team did fine.

    I was also pleasantly surprised to see the feature on Gibson & his medium size (multi-billion) operation in a Northern suburb of Chicago.
  • I remember Janus in the dot com era.
    I was invested in Janus Overseas for several years around that time.
    Helen Young Hayes' results at Janus Overseas and Janus Worldwide were great for many years.
    Performance then suffered - IIRC, asset bloat was at least partly to blame.
    She exited in 2003 and so did I.
  • edited February 2023
    Didn’t mean to suggest anyone was talking their book ...:)

    I’ve cited Blackrock’s global fixed income head Rick Rieder on a few past occasions who sounds ecstatic about opportunities in fixed income. I haven’t a clue - except to say that 3.85% on the 10-year certainly looks more appealing than 0.50% did little over a year ago. Yes, it was a very good interview with Gibson Smith. Certainly sounds knowledgeable.
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