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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.
  • Multi-Asset Income Funds: Is the Extra Income Worth the Extra Risk?
    msf said:
    "A bet on higher yield may pay off nine years or out of ten, or even better, but that just means that when 00 comes up, the impact is likely to be more severe. IOFIX, SEMMX and their brethren were never "cash subs", regardless of how sedate they looked before 2020."
    IOFIX and SEMMX were touted as "cash subs" by some participants on another investing board.
    This was before IOFIX returned -36.18% and SEMMX returned -20.85% in 2020 Q1 ¹.
    ¹ returns reported by Morningstar
    Observant1 in Fund Discussions
  • Multi-Asset Income Funds: Is the Extra Income Worth the Extra Risk?
    The point in the excerpt below cannot be emphasized strongly enough. There is a reason that some bonds or funds pay more. It is called risk premium. That is not a free lunch. A bet on higher yield may pay off nine years or out of ten, or even better, but that just means that when 00 comes up, the impact is likely to be more severe. IOFIX, SEMMX and their brethren were never "cash subs", regardless of how sedate they looked before 2020.
    Return-Based Risk Measurements Miss the Mark
    The fundamental risks that we see in multi-asset income funds, moreover, can hide in plain view for extended periods. That is, when looking at metrics based on trailing returns, funds can look sedate until a crisis. On this front, multi-asset income funds faced a comeuppance in early 2020 during the pandemic panic from Feb. 19 through March 3.
    The classical volatility measure is historical standard deviation, which didn’t signal an impending problem heading into the 2020 crisis. From 2012 up through early 2020, it would have been fair to call multi-asset income funds sedate based on it. Over this nine-year period, they had an average three-year standard deviation of 6.6%, roughly two thirds that of the S&P 500 index’s 10.5% mark. At the end of 2019, multi-asset income funds’ average three-year standard deviation was just below that level, at 6.4%.
    msf in Fund Discussions
  • SEC Cites IOFIX
    Interesting IOFIX info from Jeff Ptak:
    "In case you were wondering: Since 1/1/20, AlphaCentric Income Opportunity Fund has reported a 0% daily return in 47% of trading days. Despite that, it has been >3x more volatile than avg Multisector fund and had a 40%+ drawdown, which is ~3.5x the category avg."
    Observant1 in Fund Discussions
  • SEC Cites IOFIX
    https://twitter.com/syouth1/status/1532812607668858880?s=20&t=EgdoGmliyvJLHd2qiT_kDQ
    https://twitter.com/syouth1/status/1532814602186149888?s=20&t=EgdoGmliyvJLHd2qiT_kDQ
    Charles Charles in Fund Discussions
  • Another Absolutely Awful Day for Bond Funds
    PIMIX -8 cents
    PMZIX -8 cents
    DODIX -9 cents
    IOFIX -9 cents
    But CBLDX?
    Positive.
    And ZEOIX and RPHIX and DLDFX?
    Even.
    Charles Charles in Fund Discussions
  • RCTIX - Manager Change
    @davfor, don’t let me or anyone sway you on this fund. I didn’t realize you were a multi year investor in this fund. Thought you might have been like so many where the hot money momentum bond traders gravitated to this fund because it was up YTD earlier this year. This current downswing pretty much had them all selling. May revert back to a steadier course now that momentum traders are gone. It’s not even down 2% for the year. Albeit the entire sector looks pretty weak especially IOFIX and SEMPX.
    Junkster Junkster in Fund Discussions
  • RCTIX - Manager Change
    The mortgage funds have been trading like they are broken for a couple months now. It began with SEMPX and BDKAX. It was only inevitable this weakness would filter down to their sister funds IOFIX, DPFNX, and RCTIX. Very illiquid holdings. EIXIX and RCTRX have held the best in this sector. Ominous that these funds have performed so poorly in light of a strong undercurrent recently in junk bonds. Not sure what can turn these around other than strength in the 10 year.
    Junkster Junkster in Fund Discussions
  • M* -- Bond Investors Facing Worst Losses in Years
    A part of me struggling to understand the handwringing for buy-and-hold investors.
    If you have a say 50/50 allocation between stocks and bonds, why would you not just rebalance? Take-advantage of the cheapness?
    I get it with trend-following or trading strategies, which I like, but don't long-term investors need to accept that some years will be worse than others, no matter what the asset class?
    I saw DODIX mentioned.
    Let's say by end of year, it's -9%. About its worst MAXDD. Don't two +9's get remembered, as in 2019 and 2020?
    Here are calendar year returns going back to 1990:
    Year Count: 32
    Worst Year: -2.9
    Best Year: 20.2
    Average Year: 6.4
    Sigma Year: 5.5
    YTD (thru 3/24): -5.6
    2021: -0.9
    2020: 9.4
    2019: 9.7
    2018: -0.3
    2017: 4.4
    2016: 5.6
    2015: -0.6
    2014: 5.5
    2013: 0.6
    2012: 7.9
    2011: 4.8
    2010: 7.2
    2009: 16.1
    2008: -0.3
    2007: 4.7
    2006: 5.3
    2005: 2
    2004: 3.6
    2003: 6
    2002: 10.7
    2001: 10.3
    2000: 10.7
    1999: -0.8
    1998: 8.1
    1997: 10
    1996: 3.6
    1995: 20.2
    1994: -2.9
    1993: 11.4
    1992: 7.8
    1991: 18.1
    1990: 7.4
    Granted, all during secular bond bull. But there were certainly some periods in there of rising rates, if not with concurrent inflation.
    Also, if there is sufficient liquidity, and there seems to be, why is selling a bond or TBill early bad? Can't you just pick-up another with the reduced principal but higher interest for the remainder of the planned term? Don't you end up in same place, less trading fee/bid spread?
    Now if liquidity is crashing, I get it (e.g., IOFIX in March 2020, I do remember and will never forget). Is that what the concern is for investors ... that there will not be enough liquidity with everybody running for the door in bond fund land, perhaps including the Fed?
    Excellent analysis and summary. I understand the worry with bonds but most investors are not able to trade in and out to successfully chase the best returns. The B&H path I am following.
    Gary1952 in Fund Discussions
  • M* -- Bond Investors Facing Worst Losses in Years
    A part of me struggling to understand the handwringing for buy-and-hold investors.
    If you have a say 50/50 allocation between stocks and bonds, why would you not just rebalance? Take-advantage of the cheapness?
    I get it with trend-following or trading strategies, which I like, but don't long-term investors need to accept that some years will be worse than others, no matter what the asset class?
    I saw DODIX mentioned.
    Let's say by end of year, it's -9%. About its worst MAXDD. Don't two +9's get remembered, as in 2019 and 2020?
    Here are calendar year returns going back to 1990:
    Year Count: 32
    Worst Year: -2.9
    Best Year: 20.2
    Average Year: 6.4
    Sigma Year: 5.5
    YTD (thru 3/24): -5.6
    2021: -0.9
    2020: 9.4
    2019: 9.7
    2018: -0.3
    2017: 4.4
    2016: 5.6
    2015: -0.6
    2014: 5.5
    2013: 0.6
    2012: 7.9
    2011: 4.8
    2010: 7.2
    2009: 16.1
    2008: -0.3
    2007: 4.7
    2006: 5.3
    2005: 2
    2004: 3.6
    2003: 6
    2002: 10.7
    2001: 10.3
    2000: 10.7
    1999: -0.8
    1998: 8.1
    1997: 10
    1996: 3.6
    1995: 20.2
    1994: -2.9
    1993: 11.4
    1992: 7.8
    1991: 18.1
    1990: 7.4
    Granted, all during secular bond bull. But there were certainly some periods in there of rising rates, if not with concurrent inflation.
    Also, if there is sufficient liquidity, and there seems to be, why is selling a bond or TBill early bad? Can't you just pick-up another with the reduced principal but higher interest for the remainder of the planned term? Don't you end up in same place, less trading fee/bid spread?
    Now if liquidity is crashing, I get it (e.g., IOFIX in March 2020, I do remember and will never forget). Is that what the concern is for investors ... that there will not be enough liquidity with everybody running for the door in bond fund land, perhaps including the Fed?
    Charles Charles in Fund Discussions
  • M* -- Bond Investors Facing Worst Losses in Years
    You can go all in on the interest rate trade and short treasuries with an inverse fund TBF or TBX.
    If interest rates continue to rise, PFIX will continue to do well.
    Or look at funds that have not crashed so far this year. RCTIX ICMUX RPHIX are down a bit but probably will not yield much and won't make a lot of money.
    Same thing is true of short duration bond funds like VUSFX.
    I am a bit concerned that RCTIX and ICMUX are sorta a black box, focused on RMBS and non agency MBS. Remember IOFIX?
    Lots of people are recommending dividend stocks. I am very reluctant to increase my equity exposure by buying dividend stocks just to get income. Consumer staples and Utilities are more resilient to market declines, but could still drop 20% in a major recession.
    Right now I am staying in cash and short term bonds funds, with some RCTIX ICMUX RPHIX and PFIX
    I am open to other ideas.
    sma3 in Fund Discussions
  • Tough Day in Bond Land
    PMZIX -6 cents
    DODIX -11 cents
    CLMAX -6 cents
    PIMIX -4 cents
    OSTIX -7 cents
    PDIIX -7 cents
    MWIGX -7 cents
    MWFEX -5 cents
    BHK -12 cents
    DMO -29 cents
    Better ...
    RCTIX -1 cent
    CBLDX -1 cent
    DLDFX -2 cents
    SEMMX -1 cent
    ICMUX -1 cent
    ZEOIX -3 cents
    DHEAX -2 cents
    RHHIX -1 cent
    But, look here:
    IOFIX even
    DPFNX even
    BDKAX even
    Charles Charles in Fund Discussions
  • Only 3 Multi-Sector Income Mutual Funds Above Water YTD
    HMEZX and PVCMX are both up YTD. Its nice to see a little green in there somewhere.
    Lots of funds green for the year just very few in the multi sector income category as Charles was alluding to. RCTRX is a little known income fund that has held firm through the turmoil in its sister funds ala IOFIX, SEMPX, and others. At one time I saw where you were a holder of RCTRX which was a good move. I had tried to purchase it awhile back but unable to do so. I wouldn’t necessarily advise buying it now though.
    Junkster Junkster in Fund Discussions
  • Thoughts On The Market
    Mortgage credit, which has stayed calm and barely positive during the YTD storm, is showing some weakness now, with IOFIX's blowout of the last two days leading the way.
    AndyJ in Other Investing
  • and the February issue is live in 3 ... 2 ... 1 ...
    Warning: So did FAAFX, WBMIX, AQRIX, QVAL, IOFIX, ZEOIX.
    Charles Charles in Fund Discussions
  • Getting off the sidelines - when?
    Maybe it is just me but still don’t see the fear associated with past declines of this magnitude. It is all about buying dips and potential buys. Although not into analogous year investing, this reminds me a bit of 1973. There we had weak January performance after a double digit gain in 1972. Like now the weakness was due to rising oil and commodity prices and inflation fears with a Fed that was about to aggressively raise rates. We then embarked on the longest and deepest bear market since the Depression.
    @BaluBalu. As you saw another bad day for the junk bond OEFs a bit surprising in light of the strength in the major equity indexes. Many of the bank loan funds were lower too. The latter began acting suspiciously earlier this week so I said goodbye. That leaves me at 70% with the usual suspect of IOFIX which at least so far has survived the carnage elsewhere and up YTD. The play there though seems pretty much over. Wish I could buy its younger albeit less stellar performing sister which has yet to have a down month since its October 2020 inception, but not available to me at TD Ameritrade. Kind of following in the footsteps of IOFIX which has been positive every month but five over the past 6.67 years. Of course one of those five was a doozy for those that stayed the course.
    Junkster Junkster in Other Investing
  • IOFIX Not Available through TD Ameritrade
    It seems that IOFIX can no longer be traded at TDA. Does anybody still hold this fund there, and if so, has TDA notified you and given you any options? If I remember, TDA was still offering it a week or two ago. I used to hold it at TDA, but don't own it currently.
    https://research.tdameritrade.com/grid/public/mutualfunds/profile/profile.asp?symbol=IOFIX
    franktrdr in Fund Discussions
  • Any GREEN today
    INTC, ABBV, HRL & PEP. In my fund holdings the closest I come to green was in IOFIX -0.08% or a penny.
    Mark Mark in Other Investing
  • What moves are you considering for 2022?
    I suspect we are now beyond the 2020 crash rebound period, and I think we will have to accommodate more rising interest rate impact. I don't have strong predictions about particular funds, but I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.
    Today’s 3 cent gain continued a recent pattern of outsized gains one to two trading days before ex dividend date. This is the reverse of the pattern in effect prior to 2020. Their portfolio is trading around 96 cents on the dollar up considerably from the 60 to 80 cents since 2017. So I agree its best days are behind it and thinking 2022 may only see a 4% to 5% total return. Hopefully I am dead wrong. Can’t think of many or any bond fund that had such a stellar return this year. The managers feel the fund has another 25% to 30% before the legacy non agencies play is over. I would probably cut those numbers in half if only because fund managers in general tend to be overly optimistic. Sure has been a unique and special bond fund over the years and if one was able to sidestep the carnage in March 2020 and return the following month.
    Junkster Junkster in Fund Discussions
  • What moves are you considering for 2022?
    ... I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.
    Hi dt, it's happening as we type. IOFIX has slowed quite a bit in December, and Pimco even cited non-agency mortgage weakness as a negative impact on the Pimco Income nav in the latest monthly report. Also, munis have ~ flatlined in this historically positive time.
    The stakes in my port in allocation and alt funds are slowly heading up.
    Good luck with the next round of investing decisions.
    P.S. Good commentary from Junkster on IOFIX.
    AndyJ in Fund Discussions
  • What moves are you considering for 2022?
    I suspect we are now beyond the 2020 crash rebound period, and I think we will have to accommodate more rising interest rate impact. I don't have strong predictions about particular funds, but I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.
    dtconroe in Fund Discussions