Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

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.

    Support MFO

  • Donate through PayPal

Any limits to how far a fund can fall in a single day? Old Thread / New Question / Same Fund

edited February 2023 in Other Investing
Any limits per regulation as to how much a single open ended mutual fund can lose in a single day?

I suspect the answer is No. But thought it an interesting question after looking at my watch-list today and noticing that OPGSX, a fund I once owned, fell 14.67% for the day. A big Ouch!. Suspect that's more than most are prepared to lose in a year's time. Gold was off $36 today at last look. Off about $100 since the election.

Nasty stuff to play around with.

FWIW

Comments

  • Why would anyone in their right mind invest in this? 1.2 AUM, wow.
  • Those are very special minerals, indeed!
  • Did not FAIRX or SEQUX fall a ton in one day?

    Gold, man.
  • In the 1987 crash I had a fund that was down over 20% that day. That was a plain equity fund. Gold funds can be vicious on the downside as well as exhilarating on the upswing. It's just their nature when volatility comes into play.
  • msf
    edited November 2016
    It was down 7.90% for Nov 10th, while the category average fund didn't fare that much better, off 5.85%. (Data from M*) Dropped from $18.74 to $17.26. On Veterans Day it dropped another 7.36% to $15.99. (Daily prices from Yahoo)

    That 14.67% drop is the combined drop over two days. (From my handy dandy calculator)

    To put this in perspective, there are just 19 funds in the M* category of equity precious metals. Several of these are purely gold funds. Obviously (from its name alone), OPGSX invests more broadly. There are 10 funds that invest in equities involved in gold and other precious metals. The two top rated funds (4*) of these ten are VGPMX and FGLDX.

    While the Vanguard fund did better than Oppenheimer over the past two days (down 10.94%), Invesco was more in line with Oppenheimer. It dropped from an initial price of $4.98 to close at $4.67 on 11/10, and $4.38 today. That's a combined loss of 12.05%.

    I'm afraid you may be looking at Yahoo's "daily" performance figures, which are (as I write this) reporting two day drops, not the supposed daily returns.

    Another factor - there's a difference between gold funds and gold mining company funds. See, e.g. ETF.com, Commodity ETFs: Gold Miners Vs. Gold

  • edited November 2016
    Yep - Yahoo appears to have had an "off day" Friday when I posted. Lipper is confirming a 7.9% drop for the 11th of Nov. (Friday). When I tried to access my Yahoo tracker this morning (Saturday) I was met with the following:

    Yahoo Will be right back...
    Thank you for your patience.
    Our engineers are working quickly to resolve the issue.


    Sorry for the misleading info. (I thought a lot of their reporting for my own funds seemed off last night as well.) But yes - gold (and gold funds) are getting hammered this week. Not to dismiss the desirability of some limited exposure to the metal (IMHO), but these types of funds are nothing to play around with.

  • But they are nothing not to play around with either
  • MJG
    edited November 2016
    Hi Guys,

    I'm a long term investor and do not frequently monitor the value of my portfolio. For me, a rough quarterly check serves my purposes with at least one annual,exception. In early December I do check more often as I prepare for my annual mandatory required withdrawal. At that time, my final decision is probably most heavily weighted by a goal to rebalance to my planned asset allocation percentages.

    Checking a portfolio too often can be hazardous to the overall health of that portfolio. Sudden downdrafts might encourage an overreaction that does more harm than good. Here is a Link to advice offered by Investors Business Daily:

    http://www.investors.com/how-to-invest/investors-corner/biggest-single-day-point-loss-may-signal-time-to-sell/

    One common decision criteria recommends selling if a single day drop is the maximum one in the current cycle. Lots of diverse opinions on this controversial subject. Whatever makes you most comfortable that you consistently execute is likely a reasonable tactic.

    I fully recognize that many of you are far more attentive to your portfolios then I am. I take advantage of hiring only mutual fund managers who mostly relieve me of that arduous duty.

    Best Wishes.
  • edited November 2016
    MJG said:

    Hi Guys,

    - I'm a long term investor and do not frequently monitor the value of my portfolio ...

    - Checking a portfolio too often can be hazardous to the overall health of that portfolio.

    (1) Bully for you.

    (2) Baloney. Checking your portfolio won't harm it any more than taking your temperature with a thermometer (pick your entry point of choice) will harm your health.

    But if you insist on repeating this sanctimonious crap enough times, I'll feel obligated to label any future posts I make with a disclaimer that it is "not intended for (your) reading or consumption."
  • This week was crazy to say the least. Many sectors have a quick flip flop including precious metals, bonds, EM debts and equity, REITs, financials and health care.
  • MJG
    edited November 2016
    Hi Hank,

    Sorry if my submittal got under your skin and irritated you. By no means was that my intent. Blame it on my amateur writing style.

    My posting purpose this time was to document my investing practice. I surely was not suggesting that anyone else should duplicate that practice. At all times, to each his own.

    I just about never post to recommend or reject a specific fund or to advocate an investment approach. Again, I believe in a to each his own approach. Magic investment bullets simply do not exist. If it works today, it may well be a disaster tomorrow.

    I consider myself a pedestrian investor with rather pedestrian outcomes. Over a very lengthy timeframe I have evolved (devolved if you prefer) into a more passive mutual fund holder. That's just me.

    Whatever makes you a more comfortable and happy investor is terrific. Registering a faulty thermometer reading can indeed be harmful to your health if it encourages you to take imprudent and unnecessary health actions. Bad data can do damage in that limited sense.

    Best Wishes.
  • edited February 2023
    Resurrecting very old thread … Sorry for any confusion. Consider this “an oldie goldie”.

    Can’t read Morningstar’s “analyst ratings” because I don’t subscribe. But they offer a tantalizing opening bit of their write-up for free. Here’s the lead-in from Morningstar’s site …

    ”A middling Parent Pillar rating and a subpar People Pillar limit Invesco Gold & Special Minerals A to a Morningstar Quantitative Rating of Neutral.”

    But when you look at their overall rating for the fund, displayed more prominently at the top of the same page, it shows 5 stars.

    This turkey aside, what is it about Morningstar’s methodology that causes a “middling” fund, in their own words, to receive a 5-star rating? Also, if anyone knows, I’d be interested in whether anything about this fund’s management changed after Invesco assumed control of the former Oppenheimer funds? Wondering to what extent those 5 stars represent a legacy from the days when Oppenheimer ran the fund?

    ISTM Invesco already had an (inferior) gold fund when they bought out Oppenheimer. Did they essentially “axe” the superior Oppenheimer fund and its management and then apply that name to their own inferior fund - moving the invested assets into it as well?

  • Morningstar Ratings 101: What You Need to Know

    "A 5-star risk rating indicates that a fund has been among the market's top performers in terms of risk-adjusted return over the past three, five, or ten-year period."
  • I would say ignore Morningstar and compare OPGSX with other gold funds using Fidelity's screener. SGGDX compares favorably to OPGSX with a standard deviation 25% lower. SGGDX also has the highest 3 year Sharpe Ratio in the category as well. I'm not recommending these funds-just providing a bit more info.
  • edited February 2023
    Same manager since 1997.

    Gold-mining has been terrible for B&H and being top performer in category for 3,5,10 years doesn't mean much. * ratings are based on past performance only within the category, and overall * rating is a weighted average of *s for 3, 5, 10 years.

    Analyst ratings take into account several factors besides the past performance. However, Analyst ratingsQ are computer-generated and are hard to read or make sense out of. It's NeutralQ here. May be M* can train ChatGPT to do a better job.
  • @hank, I believe ratings are based on a peer group comparison. M* says 5* compared to 68 funds. If all the funds in that group sucked, someone had to be less sucky than the rest.

    @ carew388, I believe SGGDX may be the only PM/miner fund that actually holds gold too, not all equities. I think it holds about 20% of the actual yellow stuff. That will smooth out volatility.

    If I were to hold one of these funds it would be SGGDX - but I won't:)

    As G.W. Bush infamously said:

    “There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.”

  • edited February 2023
    carew388 said:

    I would say ignore Morningstar and compare OPGSX with other gold funds using Fidelity's screener. SGGDX compares favorably to OPGSX with a standard deviation 25% lower. SGGDX also has the highest 3 year Sharpe Ratio in the category as well. I'm not recommending these funds-just providing a bit more info.

    Words from the wise. ...Although I'm too lazy to do it. Morningstar has become too convenient for me. I recognize their marker "Q" which tells you that some A.I or quant formula has been used to MECHANICALLY rate that stock or fund.... I get the Morningstar subscription via TRP. Sometimes, the text is helpful.

    And @MikeM: hilarious! Thank you.
  • edited February 2023
    ”Same manager since 1997” Thanks for the follow through Yogi. Very interesting.

    Somewhere I heard this fund was more volatile than most but also more profitable. I’ll confess to often reading a forum that’s quite focused on gold / miners. And while I’m strictly an amateur observer there, it appears from what I read that there are stark differences in how different p/c mining companies have fared in recent years. Apparently this relates to the “sporadic” quality of various mines they own. Some have prospered while others have lost tons. Possibly OPGSX is intentionally investing in the under-performers as a longer term play.

    I guess it bothers me that M* allows fund houses to post its “4 and 5 star” ratings (I’d imagine in return for compensation) as testimony / advertisement for their funds on their websites and than undermines that very rating in publishing critical reviews for readers willing to fork over additional $$ to see what their analysts really think about a fund. ISTM they’re making $$ on both ends here.
  • msf
    edited February 2023
    hank said:

    Can’t read Morningstar’s “analyst ratings” because I don’t subscribe.

    Try your local library. As I'm typing this, I have the M* analyst (AI) report open from my library.
    hank said:

    Here’s the lead-in from Morningstar’s site …

    ”A middling Parent Pillar rating and a subpar People Pillar limit Invesco Gold & Special Minerals A to a Morningstar Quantitative Rating of Neutral.”

    But when you look at their overall rating for the fund, displayed more prominently at the top of the same page, it shows 5 stars.

    This turkey aside, what is it about Morningstar’s methodology that causes a “middling” fund, in their own words, to receive a 5-star rating?

    As others have commented, star ratings are objective, retrospective. Analyst ratings are subjective, prospective. And worse if done by machine.

    Beyond that, I'm rather skeptical of the value of the parent pillar. That pillar encompasses a variety of attributes, some of which IMHO don't contribute to forecasting accuracy. (I've been meaning to do some more research here and write something up; may still get to it.) Here, the middling rating appears to be because the family's funds are all over the map, not showing many areas of strength.

    The weak people pillar comes in part from the computer's assertion that the sole manager, Li, has not yet shown "themself" good at running this strategy. One wonders what a machine "thinks" it needs to recognize good performance beyond a 5* rating from someone who's managed a fund for a quarter century. A great example of why I pay little attention to M*'s 'Q' ratings.
    hank said:

    ISTM Invesco already had an (inferior) gold fund when they bought out Oppenheimer. Did they essentially “axe” the superior Oppenheimer fund and its management and then apply that name to their own inferior fund - moving the invested assets into it as well?

    Yogi answered this. To complete the details: Invesco merged Invesco Gold & Precious Metals (FGLDX) into Invesco Oppenheimer Gold & Special Minerals Fund (OPGSX), not the other way around, near the end of 2019.
    https://www.prnewswire.com/news-releases/invesco-announces-changes-to-its-us-etf-and-mutual-fund-product-lines-300974616.html
    hank said:

    fork over additional $$ to see what their analysts really think about a fund.

    Fork over money and you still won't get to see what their analysts think about this fund (or many others). You'll just get to see what their computers "think". For the very little that is often worth.
  • edited February 2023
    Thanks for the insights @msf. Not much desire here to read M* analytics - especially after reading your take. As some might remember, I long held some money directly with Oppenheimer, then was moved to Invesco after the buy-out, and finally transferred that sum into a brokerage at Fido. So I have more than a little past experience with Oppenheimer & Invesco.

    On rare occasions I’ll start tracking a fund’s recent performance (for no good reason). Might be one I own, or just one I know something about from past experience. I’ll hit several sites, including MarketWatch, Fidelity, Morningstar and Google (which pulls up fund performance stats as well). Sometimes others. This morning the M* issue caught my attention. Glad several here could shed more light on my querry.
    -

    @MikeM - I’ll agree GWB looks better and better in hindsight. But he once badly garbled in public the quote you referenced! You might recall another old saying about curing a hangover with “a hair of the dog that bit you.” So maybe you need to indulge again.:)
  • Interesting question...I do remember BLNDX falling ~ 5% in a day I believe it was autumn of 21'. Kept thinking, nah, it's too early for a distribution etc...it was real...it stung.

    ISTM it all depends on how much you have in that investment and how much/if you are hedged..

    I'd ask what is the largest drawndown in a week...most flushes seem to take place over 3 days...some Friday night are tougher than others if you get the whammo down in your portfolio and have all weekend to fester on it...

    I also remember reading something online where some "limit" what they are willing to risk in the market based on what they earn in 12 or 6 months or 3 months etc...my personal limit is 3 months but likely cause I am so risk adverse?

    Good Luck and Good Health to all,

    Baseball Fan
  • edited February 2023
    ”if you are hedged”

    Therein lies the problem. How much to hedge and what instruments to use. @BaseballFan had good luck using HSGFX last year I believe. Some use (inverse funds) SPDN or DOG to hedge. I believe investment grade bonds AAA rated @ 10 years or further out might be a useful hedge. The problem with most hedges is they will lose you money during good times. (I haven’t forgotten cash either, which I’m sure some consider a hedge.)

    Some articles I’ve read recently have mentioned CCOR as a good hedge against stock market downside. But I remain undecided on that. It does not have a long enough track record IMHO.
Sign In or Register to comment.