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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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David's November Commentary is posted


  • edited November 2013
    David: Interesting discussion of Morningstar ratings - particularly with respect to RPHYX. I'm in agreement. To me classifications and ratings (taken as a whole) from M* and others often appear arbitrary, capricious, and display serious lack of understanding of certain funds' missions and methods.

    FWIW: Lipper and Max Funds haven't exactly published glowing recommendations either.

  • Nice distribution this month @ about a 4.35 % annual rate.Thanks to David and other posters to alert many of us to this fund and it's purpose in our investment and everyday financial planning.
    Dividend and Capital Gains Distributions RPHYX
    Date Distribution 10/31/2013
    NAV 9.98 Long-Term
    Capital Gain 0 Short-Term
    Capital Gain 0 Return of
    Capital 0 Dividend
    Income Distribution 0.0364
    Total 0.0364
  • edited November 2013
    Maybe a 4.35% yield but doubtful you will see that as a total return for the year. I sort of agree with David that this fund doesn't belong in the hiyield category and is best used as a cash management fund (I wish Charles would take heed) However, if and when junk goes into a big bad bear market this fund will suffer too. One need only look at this fund during the summer of 2011 when junk had its worst bull market correction since the December 08 junk bottom. An actual bear market in junk and this fund won't be the place for a cash management proxy.
  • Reply to @Junkster: During 2011 it fell a massive 7 basis points in the third quarter while staying positive every other quarter and for the full year (+3.86%.) If that's the worst it gets, I'm staying in.
  • edited November 2013
    Reply to @expatsp: Point well taken and it may have been even less adjusting for the monthly dividend. Still, the fund has never been tested in a junk bond bear market. Fortunately those are few and very far between and other than the 2008 variety and the milder 1990 variety are much ado about nothing.
  • edited November 2013
    Reply to @Junkster: In 2008, UltraShort Bond funds were being used for cash. The category only lost 0.53% in Q3 2011, but lost 7.89% in 2008. I agree with you Junkster, that RPHYX has never been tested in a bad bear market.
  • Hi David,

    Once again congratulations on yet another hugely informative and comprehensive monthly commentary post.

    Each month I conclude that the current post is the high-water marker for your outstanding summaries; every following month you prove me wrong. The current column outdistances all preceding submittals by a substantial margin.

    The scope, breath, and depth of each edition continually astonishes me. Each month your commentary contains more actionable fund investment ideas and opportunities than the monthly financial magazines do.

    It is not just the bulk of the material that is amazing, it is more so the quality of the reporting. If an investor can not extract useful insights from your clear presentations, that investor definitely needs a private financial counselor.

    I’m sure all MFO members truly respect and appreciate your dedication and your analyses. On rare instances we might disagree with your findings, but we benefit from its introduction and from the exposure to the wide variety of options that are explored in your columns.

    It is hard to imagine your extensive time commitment. The effort must reward you with satisfying pleasure that you helped a body of individual investors. The marketplace is a confusing and perplexing challenge, and we need all the help we can absorb.

    There is little doubt that we all make better investment decisions because of your careful and fair reviews of the many (sometimes overwhelming) investment options that are accessible. Your emphasis on risk control is particularly noteworthy.

    Thank you so very much. Please continue the march.

    Best Regards.
  • Reply to @Junkster: Ha! Hi Junkster. I've promised BobC that together we will work-up alternate ratings for a few funds assuming they were categorized differently. Hey, it's not that I don't believe, like you and David and BobC and others, that a fund is mis-categorized by M*. It's that when doing ratings on several thousand funds, if I start changing the categories, I'll end-up going down a very time-consuming rabbit-hole, driving myself and probably many of you more crazy than I already do!
  • edited November 2013
    Reply to @MJG: I agree!=)

    Funny that RPHYX only gets a single star at M*, because by any risk adjusted measure, it screams. Granted, the biggest distinction is Martin, which measures drawdown...something this fund never seems to have. Even misplaced in the HY category, it still scores a 5 in the MFO rating system. It is in fact one of the new Great Owls. Here are all the GOs in this category:

    So why, then, deploy your analysts to write endless prose about domestic large cap funds? Because that’s where the money is.
    Right. That is where reprint royalties will be greatest for M*.
    You should pay particular attention to a number called the “Maximum Drawdown.”
    Hear, hear!
    Like the old Hertz commercial, the real rather than apparent answer is “not exactly.”
    Love it!
    The situation becomes even more blurred where compliance policy allows investment in ETF’s or open-ended mutual funds, which in today’s world will often allow a fund manager to construct his own personal market neutral or hedged portfolio, to offset his investment in the fund he is managing.

    Really beautiful piece by Mr. Studzinski. Thank you!

    Pretty sad to see Aegis Value AVALX adding load. It's 10 year performance is poor. And, 5 year performance mediocre. "It is the doom of man that they forget."

    Who uses words like "triumvirate"?=)

    Nice heads-up on Mr. Woodford.

    American Beacon Flexible Bond Fund ranks near the bottom of nontraditional bond category in MFO ratings. Class A shares carry a 4.75% load and 1.39 er. Here is M* performance comparison:

    John Park laid out its mission succinctly: “we pursue the maximum returns in the safest way possible.”
    Nice. I just registered for the Oakseed call.

    And, registered for the RiverPark call.

    "The Gundlash" Ha!
    Here’s a decent rule: if they can’t write a grocery list without babbling, you should avoid them. Contrarily, clear, graceful writing often reflects clear thinking.
    Many managers update their commentaries and fund materials quarterly...
    If they do not, avoid them.

    This new Update summary is very helpful! Thanks to Mr. Welsch.

    Tilsen Dividend TILDX, now Centaur Total Return, has a great 5 year record, mediocre 3 year, and poor 1 year record.

    Very glad Professor Snowball is beginning to see the light with regard to BBALX.

    Glad to see that Mr. Waggoner is an MFO fan.

    Mitchell Capital All-Cap Growth Fund is one sad story...ditto for Nomura Partners...and so many others, seems like.

    Great commentary David, Chip and team.

    Many thanks for doing what you do.
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