When they are behaving, I use a bank loan fund in lieu of cash. I only have 10% there but may add to it from my other positions. 7% is a nice yield in addition to some nav price appreciation. The past month bank loans have been rock solid and outperforming most other bond categories and some of the better known bond funds such as PIMIX, RCTIX, SEMMX, etc. I am not completely sure why. Maybe higher for longer in rates because of stubborn inflation, maybe a stronger economy benefitting bank loan fundamentals, who knows. We may get some answers this week as we have two major inflation reports coming out, Some are saying they may be the first to reflect the impacts of the tariffs. Stay tuned. Personally, for the sake of my other positions which are outperforming bank loans I hope both reports are benign. But “hope” rarely wins in this game,
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That would be my guess. It’s a near certainty Powell will be replaced with a more liberal Fed chair hell-bent on cutting rates at the short end when his term expires in May (if he doesn’t quit sooner). To the extent that could spur both growth and inflation, rates farther out on the curve would probably rise. So possibly you’re observing some early positioning for what appears an eventuality.
Open this link to see the power of floating rate funds. For conservative investors a real thing of beauty with almost zero volatility and with no annual losses. Unfortunately a bank loan fund out of India.
https://www.morningstar.in/mutualfunds/f000002r3h/aditya-birla-sun-life-floating-rate-fund-regular-plan-growth/performance.aspx
At the present time, I like to pair conservative funds with risky funds since I am too lazy to want to be an active trader. So, if I pick up a bank loan fund then I will likely also pick a more conservative floater. It should be noted however that in 2022 FFRHX, for one, only lost .31. Still, FLTR and FLOT ended in the black that year.
It's always interesting to bounce ideas off you @Junkster.
Below are top dozen Loan Participation funds the past 10 months (through June), based on total return. No Interval Funds. No ETFs. No CEFs. Drawdown -0.5% or less, month ending data. Sorted by return. (Click image to enlarge.)
Their tickers: RCRIX, DFLIX, CFRIX, RPIFX, NFRIX, DBFRX, DDFLX, NFIIX, PRFRX, RFRAX, SFHIX, LGRYX.
RCRIX fell 2% in April 2025.
DFLIX and CFRIX fell even more from their highs in February to the bottom of April.
Daily FLOW Chart - RCRIX Thru Monday, 14 July 25
other than hoping to best pick a representative fund, are there any tricks to getting better flow information at the sector and asset level ? (e.g, global chemicals, gold, ....)
I expect Junkster (and FD1000), however, would exit once any of these rolled more than a percent or so, if that.
I think I'll just stay short, or shorter, with the IRA.
Or, people better educated than I am can look at the correlation of fund types to each other. Do bank loans have a higher correlation to the sort of equity that would suffer if there was a major correction to the 500?
Seems like there are a lot of smoke signals, but I don't know who is tending the fire.
I really like that!
private credit has taken most of the garbage loans, and most outfits have no skill to run\improve defaulted businesses.
still, initial correlation of 1 in a economic bust.
I am late to both BL funds and EM/INTL this year. No worries though, I haven't lost a cent, yet.
I never used them as a "sub" for MM either.
My goals since retiring in 2018 is to never lose more than 3% from any last top; I did under 1%. Since 2024, it's just 1%. This means I sell any bond fund that loses over 0.5-08% which means more trades.
So while I invested a huge % in 2023-4 in CLO first time ever, in 2025 it's mostly in international bonds. In the last couple of weeks, I've only been 60+% international bonds.
BL is a subset of HY with lower SD because the duration is much lower. But, BL can go down pretty quickly 2-3%. I want to own bond funds that give me longer time to get out in time.
On the other hand, a good trader disregards the past and looks for current opportunities.
Suppose I wanted to own a fund in the last 3 months and my options were EIFAX(BL) vs RSIIX. I will select RSIIX every time based on these funds history, even if EIFAX would do more, see the chart (https://schrts.co/BWtwQURA)
Another example:
Suppose I wanted to use a very stable fund. I prefer HOBIX YTD performance over BL. I refuse to invest in volatile funds (PIMIX) even if I can make more. If PIMIX makes 9% and HOBIX makes 7% in 2025, I would always select HOBIX.
BTW, PIMIX was the first bond fund I bought and mostly held for 7-8 years (2010-2018). It was one of the easiest hold and one of the best risk/reward funds, but the magic has long gone.
See YTD chart of HOBIX,PIMIX, and EIFAX(BL) funds. https://schrts.co/NIbsQtrh
You can see how EIFAX was down 2.5% in March-April and PIMIX was down several times 1.5-2.5% in 2025.
Disclaimer: I currently don't own any of the funds above.