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Devesh Shah's conversation with Michael Cirami made me aware of the Artisan Global Unconstrained Fund (APHPX)¹. This fund's investment universe is incredibly broad. APHPX has credit exposure to Benin, Argentina, and Iraq while there is currency exposure to Uzbekistan, Turkey, and Egypt. As @JD_co mentioned, the fund has performed very well during its short existence but it hasn't really been "battle-tested." This is not a fund that I would select as my primary fixed-income position — although it could be a more speculative option for some.
DD is per month, not daily, and why it's not accurate. QDSIX is far from the bond category. It lost about 7-8% this year from peak to trough and in 2024. I would rather invest in QLEIX, it lost about the same in 2025, and 2024. In the last 3 years QLEIX made 128%...QDSIX only made 85%. Sharpe: QLEIX=2.8...QLEIX=1.2
Both should not be compared to bonds.
Earlier market tests do not guarantee future results. Many select only funds with many years of history and miss relatively great risk/reward in the last 3-6-12 months. That's fine; leave the small AUM for me and jump in after the best 3-5 years since inception.
Since then, their funds (i.e. QLEIX, QDSIX and QMNIX) have performed very well. QDSIX had the far better max drawdown during that period and also lowest SD.....and the lowest return of the 3.
Max DD for QDSIX since inception is 4.45% as per PV unless @FD1000 you have info to the contrary.
Reread my post. DD is a monthly number. If on April 1st a fund NAV is at 10, then 9 on April 20, and back to 10 on April 30th. DD=zero and tells you nothing about fact that it was down 10% from peak to trough.
I did not mean to hijack the thread, I was addressing Bitzer's question to me. Good luck to OP and anyone else shopping for a bond fund or sub, I don't have any further commentary.
Core bonds don't scratch my itch. For several years I've stayed with a couple of TRP junk funds. I'm not looking for them to go anywhere, just produce reinvestable monthly dividends. The pie gets bigger, about every 30 days. If the share price rises, that's OK, too. 7+ percent yield brings a smile.
Re question: Why do you need a core bond fund? I think it depends on where you're investing. Okay - I KNOW that MFO is about mutual funds and ETFs, but in a tax-deferred account ( and only in a tax-deferred account) you can buy an individual TIPS which guarantees almost 2 1/2% above inflation. I think of it as "I'll get the purchasing power of my principal back and I get about 2.4% of income." The mutual funds and ETFs which specialize in TIPS show poor returns b/c rising interest rates, but I can hold an individual bond to maturity. Data is at https://www.wsj.com/market-data/bonds/tips
Building a ladder of individual TIPS held to maturity is a good suggestion. I'm considering incorporating a TIPS ladder within my overall fixed income holdings in the future.
Schwab told me that the Cliffwater interval funds are essentially closed to new investments - "REDEMPTIONS only".
Followed up with Schwab again. Was told that most of their alternatives focused advisors will only talk to you if you have > $500K to give them, but that they did have access to the Cliffwater interval funds.
There is significant uncertainty surrounding Level 3¹ valuations which rely on management's internal models and assumptions. The CCLFX Annual Report dated March 31, 2025² indicates that 64.67% of the fund's investments³ were classified as Level 3 assets.
Perhaps this is overstating things a bit, but I view the pricing of funds like these as Madoff-light. Like Madoff's portfolios, funds like these can make the ride look smoother than it is. When done with a light touch, it is legal. Business judgment.
Models and assumptions allow for a fair degree of flexibility. It seems that only when declared prices diverge too much from reality are they called into question. As with Madoff and as with Heartland years ago when it failed to reprice bonds after defaults.
The SEC alleged that the Milwaukee-based investment firm failed to properly price the value of some bonds in the Short Duration High-Yield Municipal Fund and the High-Yield Municipal Bond Fund in 2000. The funds had invested primarily in non-rated medium- and lower-quality municipal bonds. When projects underlying some bonds held by the funds went into default and other projects were failing, Heartland didn't accurately re-price the funds to reflect the lower valuations, the SEC said. The net asset value of the high-yield fund plummeted 69.4% in one day, and the short-duration fund fell 44%.
"The company and its chief executive [in 2000], William J. Nasgovitz, were fined $3.5 million."
I will not invest in Heartland funds, at least so long there is a Nasgovitz there. William J. is Chairman of Heartland and co-manager of HRTVX, while his son William R. is CEO and also co-manages HRTVX.
Many people vowed they would not invest in Janus funds after its participation in the early 2000s market timing scandal. But there were a lot of changes made at the top of Janus. Heartland was and is at the other end of the spectrum. So I haven't taken a good look at the Heartland funds in decades.
One Web site, FundAlarm.com, has been running what it calls a Whiston Watch, or a tally of how long Mr. Whiston has declined to explain "his role in the Janus market timing scandal, including what he knew and when he knew it." Mr. Whiston's departure means "another ghost of the past is gone," said Robert A. Olstein, whose Olstein Financial Alert fund has been buying Janus stock. "It shows me they are moving in the right direction."
Yes I did realize that. But it was still worth commenting on. Especially since I generally feel that companies can be redeemed. Heartland is almost alone in how it stands by its man. And a 44% drop in a short term fund! Even Schwab Yield Plus didn't lose that much ("just" 42%) and it took two years, not one day, to do that.
Decided to be contrary, and bought MGOIX as the last leg on the bond fund ladder for the IRA. It's a taxable muni fund categorized as intermediate core by M* and as municipal general & insured debt by MFO P/(Lipper). Like a lot of bond funds, it hit the skids in 2022. Interest rates may very well go up from here; let's hope they don't go up 5% in a year.
Comments
of the Artisan Global Unconstrained Fund (APHPX)¹.
This fund's investment universe is incredibly broad.
APHPX has credit exposure to Benin, Argentina, and Iraq
while there is currency exposure to Uzbekistan, Turkey, and Egypt.
As @JD_co mentioned, the fund has performed very well during its short existence
but it hasn't really been "battle-tested."
This is not a fund that I would select as my primary fixed-income position —
although it could be a more speculative option for some.
¹ https://www.mutualfundobserver.com/2023/12/missed-opportunity-in-brazilian-interest-rates-sowed-the-seeds-of-finding-the-right-fund/
QDSIX is far from the bond category. It lost about 7-8% this year from peak to trough and in 2024.
I would rather invest in QLEIX, it lost about the same in 2025, and 2024.
In the last 3 years QLEIX made 128%...QDSIX only made 85%.
Sharpe: QLEIX=2.8...QLEIX=1.2
Both should not be compared to bonds.
Earlier market tests do not guarantee future results. Many select only funds with many years of history and miss relatively great risk/reward in the last 3-6-12 months.
That's fine; leave the small AUM for me and jump in after the best 3-5 years since inception.
Since then, their funds (i.e. QLEIX, QDSIX and QMNIX) have performed very well. QDSIX had the far better max drawdown during that period and also lowest SD.....and the lowest return of the 3.
YTD return as of end of September is 13.24% (per PV) with one negative month. Where are you getting your numbers from @FD?
Per Barchart, YTD as of 10/3 is 13.08%.
QDSNX:
Asset Class% Net Short Long
U.S. Equity 8.23 127.53 135.76
Non-US Equity 6.68 89.05 95.73
Fixed Income 12.79 278.80 291.59
Other 37.97 4.41 42.39
Cash 29.33 174.56 203.89
Not Classified 4.98 0.44 5.42
DD is a monthly number.
If on April 1st a fund NAV is at 10, then 9 on April 20, and back to 10 on April 30th.
DD=zero and tells you nothing about fact that it was down 10% from peak to trough.
I looked at a 3-year chart so it looked like 7%. It's actually closer to 6% but still more than your DD=4.8
If you use PV for YTD (https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=10eBW4hM7DguW80JelVpf8)
MAX draw = -1.37.
For SP500 max draw = -7.58. In reality SPY lost about 19% from peak to trough.
See (https://schrts.co/WPhBIdSe)
Strong message to follow.
Building a ladder of individual TIPS held to maturity is a good suggestion.
I'm considering incorporating a TIPS ladder within my overall fixed income holdings in the future.
which rely on management's internal models and assumptions.
The CCLFX Annual Report dated March 31, 2025² indicates
that 64.67% of the fund's investments³ were classified as Level 3 assets.
¹ https://accountinginsights.org/the-fair-value-hierarchy-explaining-levels-1-2-and-3/
² page 160
³ excludes forward contracts and swap contracts
Models and assumptions allow for a fair degree of flexibility. It seems that only when declared prices diverge too much from reality are they called into question. As with Madoff and as with Heartland years ago when it failed to reprice bonds after defaults. https://www.investmentnews.com/fixed-income/heartland-fined-39m-for-mispricing-funds/13500
"The company and its chief executive [in 2000], William J. Nasgovitz, were fined $3.5 million."
I will not invest in Heartland funds, at least so long there is a Nasgovitz there. William J. is Chairman of Heartland and co-manager of HRTVX, while his son William R. is CEO and also co-manages HRTVX.
As I recall, only HRTVX impressed. And there are enough other fish in that sea.
Name Janus has a mythological origin that can be for caution or look-both-ways. Janus became a case of lost (dot.com era) and found (much later).
I am a longtime holder of JABAX.