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Frequent Contributor

Re: 2020 - bond funds analysis


@PaulR888 wrote:

@FD1001 wrote:

Hey Gary,

Inferior = trails.  Many on M* tell me they hold their funds for years.  If that's the case the numbers below show it's not justified to own 5 bond funds (Gundlach (DBLTX) should be hiding and not come on TV).

Total Return % (06/11/2020)YTD1-Year3-Year5-Year
VBILX7.2611.255.844.94
VCOBX7.3411.245.68 
BAGIX6.0610.25.484.68
FXNAX6.269.945.244.28
TGLMX6.899.745.274.12
DBLTX2.134.243.573.4

 

I'm also sure many that have 5 bond funds also have 10 stocks funds.  Let me know if these 15 OEFs beat the combo of VBILX,SPY,QQQ.

 


Paul:       link

Gundlach and his team at TCW managed TGLMX up until 2010.  I look over total economic cycles and don't close my eyes at last 5 years.  Look how TGLMX did during other market chaos in early '00s and the GFC.  In his latest webcast Gundlach said he is very optimistic about managing bonds today, getting a good return and yield.  In Corona chaos, his DBLTX did not lose like your classic 3 fund (you often use term something should be framed for posterity, well those 3 should be framed for sure as what can go wrong)  sleep well bond portfolio and then EACH ONE lost 13% during that time.  And you had other "cash sub" picks that were even more horrendous.  I will put my faith in Gundlach and his team any day of the week and certainly instead of putting any faith in your picks.  I think you should look in the mirror to see who should be hiding out.  


Paul, It's not a surprise you defend DBLTX, you probably own it :-)

DBLTX was just a disaster in the last 5 years.  See below from M*.

Total Return % (06/12/2020)YTD1-Year3-Year5-Year
Rank in Category85918178

 

We are talking about high-rated funds and not about what I do. Please stay on the subject,

BTW, How much did you lose on Thursday and this week? I was up on both :-)

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Re: 2020 - bond funds analysis


@FD1001 wrote:

@PaulR888 wrote:

@FD1001 wrote:

Hey Gary,

Inferior = trails.  Many on M* tell me they hold their funds for years.  If that's the case the numbers below show it's not justified to own 5 bond funds (Gundlach (DBLTX) should be hiding and not come on TV).

Total Return % (06/11/2020)YTD1-Year3-Year5-Year
VBILX7.2611.255.844.94
VCOBX7.3411.245.68 
BAGIX6.0610.25.484.68
FXNAX6.269.945.244.28
TGLMX6.899.745.274.12
DBLTX2.134.243.573.4

 

I'm also sure many that have 5 bond funds also have 10 stocks funds.  Let me know if these 15 OEFs beat the combo of VBILX,SPY,QQQ.

 


Paul:       link

Gundlach and his team at TCW managed TGLMX up until 2010.  I look over total economic cycles and don't close my eyes at last 5 years.  Look how TGLMX did during other market chaos in early '00s and the GFC.  In his latest webcast Gundlach said he is very optimistic about managing bonds today, getting a good return and yield.  In Corona chaos, his DBLTX did not lose like your classic 3 fund (you often use term something should be framed for posterity, well those 3 should be framed for sure as what can go wrong)  sleep well bond portfolio and then EACH ONE lost 13% during that time.  And you had other "cash sub" picks that were even more horrendous.  I will put my faith in Gundlach and his team any day of the week and certainly instead of putting any faith in your picks.  I think you should look in the mirror to see who should be hiding out.  


Paul, It's not a surprise you defend DBLTX, you probably own it :-)

DBLTX was just a disaster in the last 5 years.  See below from M*.

Total Return % (06/12/2020)YTD1-Year3-Year5-Year
Rank in Category85918178

 

We are talking about high-rated funds and not about what I do. Please stay on the subject,

BTW, How much did you lose on Thursday and this week? I was up on both :-)


Paul:  FD, the Market (S&P 500) lost about 6% on Thursday.  I lost about 3.5%.  I am back to my daily beta to Market in tight range of .3 to .6.  I am where I expect and hope to be.  Corona chaos was unusual black swan.  I don't judge my portfolio by that.  I am fine after over 7 years in retirement.  Let me ask you a question.  My portfolio was up 20% in 2019.  How did you do?  

P.S.  Today my portfolio is up 1.26%.  REITs and BDCs had a good day.  

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Re: 2020 - bond funds analysis


@FD1001 wrote:

Today may be another pivotal day.  VIX jumped to almost 41, stocks crashed, the risk is elevated, rated are down sharply but BND wasn't up which is what you expect from a high rated bond index.  VBTLX which is equal to BND but doesn't trade was up 0.08%

All the above doesn't make sense to me. Maybe it is just short term. I do the usual when the markets don't make sense to me I sell. Today I sold about 50% on my portfolio which was at 99+% in bond OEFs.

Surprisingly, HY Munis still did pretty well.  The riskiest HY Munis (NHMAX+ORNAX) were up 0.18, 0.25% but GWMEX +0.5%

Securitized Multi did reasonably well...EIXIX=no change..IOFIX -0.3%...SEMMX +0.9% (what?)

Other Multi not so much...PIMIX -0.8...TSIIX -0.4%...JMUIX -0.5%....PTIAX +0.27%(does well when others don't)

NonTrad not great either with uneven losses JSIAX -0.2...MNCPX -0.4%...others much worse...IISIX did well with only -0.1%

Higher rated bond...ANBEX -0.1...SCCIX -0.2...BCOIX 0.08%(fixed)...VBILX -0.07%

YTD I'm comfortably over 9%. Sitting out for a while is a no brainer.  Maybe I will sell it all because I can't trust HY Muni to carry my portfolio in all markets...or maybe I will be all in next week.  

The above is not a recommendation. Do your own due diligence.  I have said it at least  500 times.


6/13/2020

Last Thursday(2 days ago) I was at about 50% cash and now I'm at 95+% in cash.  HY Munis which I had close to 60% of my portfolio were on a tear in the last month and even last week. YTD I'm way over my goals. I can take time out and can "miss" some performance.

muni.PNG

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Re: 2020 - bond funds analysis

FD, Thanks for your update.  I watched the last 2 days with some concern.  My bond oef holdings are not as risky as what you were holding.  My holdings did experience a small drop in those 2 days, but it has been more of a slow bleed than anything serious so far.  I have decided to let them ride for now.  I will re-evaluate my options next week to see if I need to take a stronger intervention to protect principal.

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Participant ○

Re: 2020 - bond funds analysis

FD1001, 

Thank you for the post about municipal bond funds. I will keep a watch on for 3 weeks and then buy into them slowly.

I had exited bond funds and I got back into ANBEX and few other funds mentioned in the forum about a month back. I also had ETFs LQD, MUB.  I have reasonable size holding in PRWCX and VLAIX. They have 15 and 30% bonds.

SRT

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Re: 2020 - bond funds analysis

My question is, especially now, why hold bonds at all?   I have some pretty good funds - WACPX, PIGIX, BAGIX, SWSBX, PDIIX.  I think they cover the bases, and they have done ok.  But going forward, SEC projected yields are low.  SCHD 3.59 and EFAV 3.29 Have better yields.  So why hold the bonds?  For  maybe ballast? They did not give much ballast in March.  Just wondering.  But think I need to increase stock exposure. Thank you

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Re: 2020 - bond funds analysis

My question is, especially now, why hold bonds at all?   I have some pretty good funds - WACPX, PIGIX, BAGIX, SWSBX, PDIIX.  I think they cover the bases, and they have done ok.  But going forward, SEC projected yields are low.  SCHD 3.59 and EFAV 3.29 Have better yields.  So why hold the bonds?  For  maybe ballast? They did not give much ballast in March.  Just wondering.  But think I need to increase stock exposure. Thank you for any helpful advice. 

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Re: 2020 - bond funds analysis


@BD wrote:

My question is, especially now, why hold bonds at all?   I have some pretty good funds - WACPX, PIGIX, BAGIX, SWSBX, PDIIX.  I think they cover the bases, and they have done ok.  But going forward, SEC projected yields are low.  SCHD 3.59 and EFAV 3.29 Have better yields.  So why hold the bonds?  For  maybe ballast? They did not give much ballast in March.  Just wondering.  But think I need to increase stock exposure. Thank you for any helpful advice. 


I never cease to be amazed by poster questions such as "why hold bonds at all" on this thread.  He has repeatedly noted he is not a yield investor, he does not invest in bonds for "ballast" for stock holdings, and has not been investing in stocks for the last several years because he is making his 6% TR investing objective, by trading in and out of bond oefs when there is momentum profits to be made.  He made a nice profit in investing bond oefs in the first couple of months of 2020, sold all his bonds prior to the March crash and was 100% in cash, reinvested almost all of his cash in various bond opportunities since March making additional TR for the year, went back to 95% cash a couple of weeks ago as he now was up to 9% TR for the year, and his style is now waiting to see another spurt in bond performance that would merit putting that cash back to work for additional TR.

Do you not read his thread and understand his approach to investing in bond oefs?

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Re: 2020 - bond funds analysis


@BD wrote:

My question is, especially now, why hold bonds at all? 


No reason to do so if you are indifferent to up and down gyrations and believe that the landscape of the rest of your investing lifetime will have a strong resemblance to the landscape thus far.

Most likely you already knew that.

Any 11 year old can read the chart of past total returns.

How indifferent are you? How confident are you that your indifference level will remain unchanged?

Opinions and forecasts mean little or nothing to the extent you don't act on them. The rest of it is Internet gasbagery.

 

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Re: 2020 - bond funds analysis

To the question why would anyone invest in bonds.  The answer is because a good bond manager can find good return, and yield if that is important to you, over and above any other investment you can find that serve a similar function of adding defense or brakes for your equity holdings.  And if rates go up, yes you temporarily have a hit to your principal, but then that creates an even better environment for a good bond manager to do their thing.  Where else do you want to go, if not bonds?  A bank?  Good luck with that.  

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Re: 2020 - bond funds analysis

The Fed announced it's bond support on Monday after stocks were down over 2%, then interest rates went up dramatically (10 years treasury to 0.8). On Tues-Wed it was back to "normal" if you can call it that way.  The 10 year treasury was back to 0.7.  On Wed afternoon I was back to be invested at 99+% in my old positions (please read back until you find it).  The Fed decided to support bonds at all costs and showed their cards again, there was no point to fight it.

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Re: 2020 - bond funds analysis

Below several funds from mostly higher-rated plus category. The top 2 continue to have good results in all periods and difficult to beat.  The third one is doing pretty well too.

 
 Total ReturnTotal ReturnTotal ReturnReturnTotal ReturnTotal ReturnSDMorningstarMorningstar
Ticker1 Week1 Month3 MonthYTD12 Month3 Year3 YearReturnRisk
ANBEX0.092.549.1914.1816.17.383.59HighAverage
SCCIX0.153.0510.3912.6315.577.533.87HighAverage
SCPZX0.144.3512.9112.5915.547.414.31HighAverage
GIBIX0.43.255.498.479.825.432.86HighLow
SAMFX-0.061.275.548.4510.734.993.5Above AverageBelow Average
SBBIX0.222.637.767.1510.85.413.76AverageAverage
JFLEX0.142.997.846.7211.085.274AverageAverage
STYAX-0.073.648.156.139.655.34Above AverageAverage
LSIIX0.174.218.365.519.25.375.15Above AverageHigh
TOBYX0.183.647.575.179.064.814.83AverageAbove Average
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Re: 2020 - bond funds analysis


@FD1001 wrote:

Below several funds from mostly higher-rated plus category. The top 2 continue to have good results in all periods and difficult to beat.  The third one is doing pretty well too.

 
 Total ReturnTotal ReturnTotal ReturnReturnTotal ReturnTotal ReturnSDMorningstarMorningstar
Ticker1 Week1 Month3 MonthYTD12 Month3 Year3 YearReturnRisk
ANBEX0.092.549.1914.1816.17.383.59HighAverage
SCCIX0.153.0510.3912.6315.577.533.87HighAverage
SCPZX0.144.3512.9112.5915.547.414.31HighAverage
GIBIX0.43.255.498.479.825.432.86HighLow
SAMFX-0.061.275.548.4510.734.993.5Above AverageBelow Average
SBBIX0.222.637.767.1510.85.413.76AverageAverage
JFLEX0.142.997.846.7211.085.274AverageAverage
STYAX-0.073.648.156.139.655.34Above AverageAverage
LSIIX0.174.218.365.519.25.375.15Above AverageHigh
TOBYX0.183.647.575.179.064.814.83AverageAbove Average

I am not seeing any strong carry over in the past week.  Tuesday was good, but Wednesday was not that impressive, and overall it seems bond oefs are pretty tepid right now, as reflected in your one week numbers above.  When you are looking at your top 3 funds, and their YTD performance, it just seems highly unlikely they could replicate their first 6 months of 2020 to achieve an annualized return of 24-28% for the year.  I think it is more likely that those YTD results will add on maybe another 2 or 3%, to possibly achieve those 12 month TR figures in your chart above.

In my humble opinion, I think it is likely that there may be some rotation of bond funds, from categories that did well in the first 6 months, to categories that were rather anemic in the first 6 months.  Risk on bond categories may be the place to be in the second half of 2020, while first half good performers may cool down.  I also am expecting volatility to be a theme in the second half, as we start dealing with the reality of bankruptcies, unemployment, state and city governments facing major cuts to compensate for their revenue losses, the political campaigns, and a coronavirus pandemic that will continue to have a dampening affect on many business areas.

I am very grateful for the strong  bond oef performance in the past 6 weeks or so, as  my portfolio is back to the 2020 highs that I had achieved before the crash.  However, I still think you will have to be strategic in what works in bond world for the next 6 months, compared to the last 6 months.

 

 

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Re: 2020 - bond funds analysis

I tend to share your concern DT. I'd like to see some discussion of why these particular funds have done so well YTD. And if those same factors might reasonably be expected to continue for the next 3-6 months. Obviously FED intervention and low rates are in play. Plus, the economy re-opening. Why has that resulted in these particular funds outperforming and why might it continue , or not. Yes, that might be conjecture, but I'd still like to hear people's thoughts on the topic. Backwards looking indicators are fine, but they are not necessarily predictive. 

I'm sure no one wants to jump on today's high flyers only to be subject to mean reversion. 

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Re: 2020 - bond funds analysis


@DrVenture wrote:

I tend to share your concern DT. I'd like to see some discussion of why these particular funds have done so well YTD. And if those same factors might reasonably be expected to continue for the next 3-6 months. Obviously FED intervention and low rates are in play. Plus, the economy re-opening. Why has that resulted in these particular funds outperforming and why might it continue , or not. Yes, that might be conjecture, but I'd still like to hear people's thoughts on the topic. Backwards looking indicators are fine, but they are not necessarily predictive. 

I'm sure no one wants to jump on today's high flyers only to be subject to mean reversion. 


If we are talking about the top 2 (maybe 3) funds in my last table then the answer is these funds are invested in high-rated bonds + they also have flexibility but their performance is uniquely higher than the rest.

Could I predicted this 6 months ago? of course not.

Am I going to predict future returns and/or the next best funds? absolutely not, for that, you can watch CNBC with plenty of "experts" like Gundlach that made fun of themselves trying to predict rates, different categories, what the Fed will do, and much more.

As a trader who follows charts and trends, I don't care about the above. I know, you and others are tired of me saying that but that's how I invest, I jump on momentum and sell when it's not there or I can find better funds and why I can never own a lagging fund for years and wonder if it's time to sell or hold and if I find just one fund that is doing better for months then I have no problem using it at a high %.  If you are not a trader and haven't practiced it for years with success then don't do it.  Suppose I was looking for a higher-rated bond fund, I would still use ANBEX and not BND,VBILX,BCOIX and others.  BTW, I'm not always using the highest performing funds it's a delicate act of risk,reward,momentum,art,markets and goals.  Maybe I will just decide to use JPST, who knows, it made 0.8% in one month.

What should others do? the usual, what's working for them.  

But, as you know, I don't use these higher-rated funds anymore because the momentum is in other categories.

DT said that maybe bonds can do another 2-3%.  That will be great.  Rotation? I don't know.  I'm just guessing that rates are in a range, higher-rated bonds would lag Multi sector, Nontrad and HY munis which are what I have been using for years.  I agree that you must be strategic, I try to be that all the time and much more in the last several months and the ones to come and why I have been trading much more.

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Re: 2020 - bond funds analysis

FD: "DT said that maybe bonds can do another 2-3%.  That will be great.  Rotation? I don't know.  I'm just guessing that rates are in a range, higher-rated bonds would lag Multi sector, Nontrad and HY munis which are what I have been using for years."

Just so there is no misunderstanding, my statement about the 2-3% is an optimistic prediction scenario for those 2 or 3 high flying funds in the chart that have already made 12-14%--I don't think they will end 2020 on the same pace of their first 6 month performance.  I actually believe more risky funds, with negative or very low YTD total return, may actually be able to produce more than 2-3% in the remainder of 2020.  I am in very conservative Intermediate Core, Core Plus, and conservative nontraditional bond oefs.  I am still expecting to move some money out my lower risk current holdings, into the multisector bond category at some point this year, because I think those very conservative bond holdings I currently have, will start looking "too conservative".  

 

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Re: 2020 - bond funds analysis

FYI, some history on Carillon.  It is new name for me, but I remember seeing Scout before:

Excerpt from Prospectus:

Supplement dated June 16, 2017 to the Prospectus dated October 31, 2016, as supplemented
 
As previously announced, on April 20, 2017, UMB Financial Corporation ("UMB") announced that it signed a definitive agreement to sell Scout Investments, Inc. ("Scout") to Carillon Tower Advisers, Inc. ("CTA") (the "Transaction").  Scout is a wholly owned subsidiary of UMB and the investment adviser to the Scout Funds (the "Scout Trust" and its series, the "Scout Funds"). As a part of the Transaction, the parties agreed to seek to reorganize certain Scout Funds (each, a "Target Fund and collectively, the "Target Funds") into the Carillon Series Trust (the "Carillon Trust").  At an in-person meeting held on May 24-25, 2017, the Board of Trustees of the Scout Trust (the "Scout Funds Board") approved the proposed reorganizations of the Target Funds into newly created series of the Carillon Trust (the "Carillon Funds"), which are to be advised by CTA and sub-advised by Scout upon completion of the Transaction.
The reorganizations approved by the Scout Funds Board include the transition of each of the Target Funds listed below into the CTA mutual fund platform by transferring the assets and liabilities of each Target Fund to a newly formed series of the Carillon Trust with substantially similar investment objective(s), principal investment strategies and risks as the corresponding Target Fund listed below (each, an "Acquiring Shell Fund" and collectively, the "Acquiring Shell Funds") pursuant to an Agreement and Plan of Reorganization and Termination (the "Plan of Reorganization"):
Target Fund
Acquiring Shell Fund
Scout International Fund
Carillon Scout International Fund
Scout Mid Cap Fund
Carillon Scout Mid Cap Fund
Scout Small Cap Fund
Carillon Scout Small Cap Fund
Scout Low Duration Bond Fund
Carillon Reams Low Duration Bond Fund
Scout Core Bond Fund
Carillon Reams Core Bond Fund
Scout Core Plus Bond Fund
Carillon Reams Core Plus Bond Fund
Scout Unconstrained Bond Fund
Carillon Reams Unconstrained Bond Fund
 
The reorganizations are not expected to change the manner in which each Target Fund is managed, and it is anticipated that the portfolio managers responsible for managing the Target Funds will be the portfolio managers for the Acquiring Shell Funds.  
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Re: 2020 - bond funds analysis


@PaulR888 wrote:

FYI, some history on Carillon.  It is new name for me, but I remember seeing Scout before:

<snip>

Here's some additional info about Carillon from M*.

"A wholly owned subsidiary of Raymond James Financial RJF, Carillon has five affiliates and a diversified lineup of 12 funds with more than $65 billion in assets under management, as of September 2019. The collection of boutiques that became Carillon began forming in 2012, when Eagle Asset Management acquired a 45% stake in the quantitative equity shop ClariVest Asset Management. After Eagle acquired global macro firm Cougar Global Investments in 2015, Raymond James established Carillon as holding company to preserve the investment cultures at each affiliate. A 2017 deal to acquire Scout Investments and its Reams Asset Management division added two more affiliates; in 2019, Carillon bought the rest of ClariVest."

 

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Re: 2020 - bond funds analysis

The odd thing is that after almost 20 years between the predecessor fund and the current fund, the AUM still range bound between $100M - $200M.  

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Explorer ○○○

Re: 2020 - bond funds analysis

This is odd.  I posted a question concerning future bond yields based on their current SEC returns.  I wondered whether it made sense to continue to invest in bonds given their likely very low future returns, especially compared to the returns available from stock funds.  This elicited a Very nasty response from DTConroe who claimed i had done various things with my portfolio.  Have no idea who he is talking about.  Have not posted here in months.  Question remains - would it be wise to increase stock allocation over the next decade given very low Projected interest rates?  Please Do not confuse me with whoever you are angry with at the moment.  I am asking a question.  Many people have the same question.  Would appreciate your views.  Would also appreciate not being attacked for what somebody else said or did. 

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