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Frequent Contributor

Re: 2020 - bond funds analysis


@archer wrote:

Any ideas on why PCI did so well today? I consider it in the equity portion of my AA, and to today it tripled most of my equity funds.


What fell hard yesterday rebounded sharply today.   https://finance.yahoo.com/quotes/PCI,PDI,PKO,NZF,NMZ/view/v1

But with 1-day delay, many bond OEFs got killed today.

YBB
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Contributor ○○○

Re: 2020 - bond funds analysis

Please quit using the phrase "cash sub". There is no such thing. Cash is cash. This market has proven that. You can't go to the store with a cash sub and buy anything. ;-)


@FD1001 wrote:……….

But wait MINT -1.35% is that supposed to be another "CASH SUB"?

 


 

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Frequent Contributor

Re: 2020 - bond funds analysis


@Gary1952 wrote:

Please quit using the phrase "cash sub". There is no such thing. Cash is cash. This market has proven that. You can't go to the store with a cash sub and buy anything. ;-)


@FD1001 wrote:……….

But wait MINT -1.35% is that supposed to be another "CASH SUB"?

 


 


Why? because you don't like it. I used "cash sub"

VUSFX + MINT have very low SD<0.4 (link) and still "failed".  See YTD (chart).  In a real meltdown, crazy things happen. If you want better protection you can use VUSFX.  It is still positive YTD.

If you want real CASH use it, not for me.  If you want to be only a buy and hold investor with a simple portfolio go ahead and do it.  With a bit of flexibility, you can do better maybe like raising cash when the world is under the Corona pandemic and stocks+bonds are melting for weeks.. 

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Re: 2020 - bond funds analysis


@FD1001 wrote:

If you want real CASH use it, not for me.  If you want to be only a buy and hold investor with a simple portfolio go ahead and do it.  With a bit of flexibility, you can do better maybe like raising cash when the world is under the Corona pandemic and stocks+bonds are melting for weeks.. 


Since you sold everything, did you advice your friends and family to liquidate everything too? I seemed to recall that what you do doesn't apply to the advice given it to others. If your followers haven't sold the bond OEFs, they are pretty much hosed.  Just wondering...

Btw, the statement "SEMMX can be used as a cash sub" is not even funny and please don't fool anyone in the future by using terms like this as it's anything but that!

Yogi says that these MBS funds have significant IO risks and I guess I missed that big piece and feel like a dope listening to all the supposedly *wise* guys on M* about how to filter the funds by looking at SD, Sharpe, Sortino, etc. They are pretty much useless in turbulent times and only work in good times but what good is it if it's not reliable?

Also, someone on these forums (maybe, you?) used to say that 2008 may not happen again and no need to use it as a model to filter the funds... The current environment is much worse than 2008, IMHO, as there is no liquidity whatsoever in the bond land.

And, the high fliers which you touted in almost every other bond OEF thread, IOFIX, EIXIX, NHMAX, etc. lost big time. This FYI is for others who are not following the day to day gyrations in the market.

Anyways, it was fun while it lasted and have fun with analyzing bond OEFs for the masses. ;)

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Frequent Contributor

Re: 2020 - bond funds analysis


@RainGater wrote:

@FD1001 wrote:

If you want real CASH use it, not for me.  If you want to be only a buy and hold investor with a simple portfolio go ahead and do it.  With a bit of flexibility, you can do better maybe like raising cash when the world is under the Corona pandemic and stocks+bonds are melting for weeks.. 


Since you sold everything, did you advice your friends and family to liquidate everything too? I seemed to recall that what you do doesn't apply to the advice given it to others. If your followers haven't sold the bond OEFs, they are pretty much hosed.  Just wondering...

Btw, the statement "SEMMX can be used as a cash sub" is not even funny and please don't fool anyone in the future by using terms like this as it's anything but that!

Yogi says that these MBS funds have significant IO risks and I guess I missed that big piece and feel like a dope listening to all the supposedly *wise* guys on M* about how to filter the funds by looking at SD, Sharpe, Sortino, etc. They are pretty much useless in turbulent times and only work in good times but what good is it if it's not reliable?

Also, someone on these forums (maybe, you?) used to say that 2008 may not happen again and no need to use it as a model to filter the funds... The current environment is much worse than 2008, IMHO, as there is no liquidity whatsoever in the bond land.

And, the high fliers which you touted in almost every other bond OEF thread, IOFIX, EIXIX, NHMAX, etc. lost big time. This FYI is for others who are not following the day to day gyrations in the market.

Anyways, it was fun while it lasted and have fun with analyzing bond OEFs for the masses. ;)


Well, over the years I have said many times that what I do is not recommended for others and you must do your own due diligence.  I mentioned many times that past performance is no guarantee of future returns.  I just analyzed fund past performance.  I didn't promise you anything.  I never got paid by anybody.

I also said that I don't invest based on 2008 but who could predict a black swan Coronavirus?

I posted several times on 3 separate forums that I sold most of my portfolio on 2/28 and over 99% on March 9. 

You are right, I couldn't enter the trade for you.

BUT, IT'S A NICE TRY TO BLAME ME INSTEAD OF LOOKING IN THE MIRROR.  

 

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Re: 2020 - bond funds analysis

Back to business.

1) At this point CASH is king.  I would use Gov or Treasury MM.

2) Don't look for very lower volatility funds that have done well because markets are very volatile and that good looking fund will start losing money coming out of this mess

3) Several bond categories will do better after credit and market stabilize.  HY, HY Munim, Muni, MBS/securitized, Multi-sectors.

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Explorer ○○○

Re: 2020 - bond funds analysis

 

  i, for one, don't blame you at all for any losses that might have recently come my way in bonds.  don't know why anybody would do that.  we're all adults here and should be capable of taking responsibility for our decisions. 

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Participant ○○

Re: 2020 - bond funds analysis

i made the mistake of exiting FRA Floating Rate yesterday to fund SCHD.  FRA up nicely from the minute after that went through, while SCHD declined by at least the same amt.  Hope it comes back down so I can get back into FRA without an even bigger loss than I already had in it.  As a CEF trading at great discount and high yield, i really regret an impulsive move like that... This is not a bottom to be buying SCHD - not yet for sure.  IMO.  Just thought i'd come here and vent. Sorry.

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Re: 2020 - bond funds analysis

Put a low ball limit order in for SCHD! We are off-topic. Sorry Mr. 1000.


@mikes425 wrote:

i made the mistake of exiting FRA Floating Rate yesterday to fund SCHD.  FRA up nicely from the minute after that went through, while SCHD declined by at least the same amt.  Hope it comes back down so I can get back into FRA without an even bigger loss than I already had in it.  As a CEF trading at great discount and high yield, i really regret an impulsive move like that... This is not a bottom to be buying SCHD - not yet for sure.  IMO.  Just thought i'd come here and vent. Sorry.


 

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Re: 2020 - bond funds analysis


@FD1001 wrote:

You are right, I couldn't enter the trade for you.

BUT, IT'S A NICE TRY TO BLAME ME INSTEAD OF LOOKING IN THE MIRROR.  


Holy smokes! You think I was blaming you for my decision? You must be living in an alternate universe. I see it as a blessing in disguise and instead of having it shelved in the bond land on a 30% PF, it's now opening up for some opportunities. 

I am planning to nibble on the stocks already with the proceeds from bond OEFs as the markets ran too fast from me. Now, I am slowly planning to add at every 100 point S&P drop.

IOFIX is down 17.24% today. Wow and whoa!

A multi-sector bond fund that can lose that much value in a day is just out of this world. Hopefully, all the M* investors bailed out yesterday or even before that. Yesterday's loss looks like a dream now. ;)

Btw, SEMMX is down 4.49% again today. This market is something else! PIMIX lost only 0.76%. Not bad!

PS: My gripe was that I foolishly thought all the risk indicators (SD, Sharpe, Sortino, etc.) will work for the much loved bond OEF funds (like SEMMX, VCFIX) which apparently didn't work for me. Not blaming anyone and never have and always blame myself for the investment decisions - I have been in 2000/2008 and now the current crash! All good and always love the volatility as I am a trader. ;)

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Frequent Contributor

Re: 2020 - bond funds analysis

Now it's getting ridiculous.  Securitized Today...IOFIX -17.2...EIXIX -3.8...DPFNX -7.7...SEMMX -4.5...VCFAX -2.8.

You realized quickly that the first 4 have lower rated securitized.  Looking at YTD, EIXIX verified my guess based on talking with the managers that they hold higher-rated bonds was correct.  Good to know for the future.

I don't know enough what went wrong but my guess is these funds had to sell holdings and came up with "make-up" price to be able to pay for the fund sales.  But, after markets stabilized (and we don't know when) these funds may have a better momo.  Only time will tell and price+chart will reflect that.

Many bonds (even decent ones like Munis and IG corp) are so mispriced but when everybody is selling crazy things happen.

WAIT...the following had a positive return today...PUCZX,JMUTX,PUTIX

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Re: 2020 - bond funds analysis

And BDKAX was down 28.95% today and down 44% from high.  So much for low SD bond funds, BDKAX SD=1.06.  I hope nobody here was holding BDKAX today.

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Re: 2020 - bond funds analysis

SD is a good metric until it's not. In fairness something else was going on the last 2 weeks with bonds.


@WordGirl wrote:

And BDKAX was down 28.95% today and down 44% from high.  So much for low SD bond funds, BDKAX SD=1.06.  I hope nobody here was holding BDKAX today.


 

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Re: 2020 - bond funds analysis

I could be wrong but SD calculated in most places on a monthly base. IOFIX lost over 1% in one day in Q4 2018.  If you try to get a price and there are no buyers it could be very low.  This is why when I see and feel a slight possible pressure I sell first, after all, I can buy it back in days.  Many years ago I practiced weekly trading with stock trading with prices at 10-12.  I have noticed that a stock trading at 10 can reach 11 faster than from 100 to 110, that was years ago. So, I was buying 1-2 stocks, then setting up trailing limits at 10%. It worked pretty well...and then...summer came and...prices were going down quickly. The stock that I own hit the 10% and now it was an open order but there were no buyers, eventually, it was sold at 30% lower and...I was even after several months.  That was the last time I played that game.  That was a learning experience when you are trading and you are ahead, 1% profit is still better than losing. So, when I play risky stuff I'm careful and in this market, I'm super careful with ST trading.

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Re: 2020 - bond funds analysis

I've been operating under the premise that chasing momentum at any level is a practice that needs to be monitored daily. Practically a hobby. This downdraft was much steeper and faster than anyone might have predicted. If a person was not prone to trading, knew what to look for, watching closely and prepared to act quickly, they should have been in the absolute safest ballast funds imaginable. Then they would have had more time to react and minimal losses. Education is expensive.

SD is a singular tool and not a comprehensive form of DD.

As to BDKAX, who in the world is paying a 1.76% expense ratio for a fund that had a 2019 (edited for typo) YTD return of 6.34% ?

 

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Re: 2020 - bond funds analysis


@DrVenture wrote:

I've been operating under the premise that chasing momentum at any level is a practice that needs to be monitored daily. Practically a hobby. This downdraft was much steeper and faster than anyone might have predicted. If a person was not prone to trading, knew what to look for, watching closely and prepared to act quickly, they should have been in the absolute safest ballast funds imaginable. Then they would have had more time to react and minimal losses. Education is expensive.

SD is a singular tool and not a comprehensive form of DD.

As to BDKAX, who in the world is paying a 1.76% expense ratio for a fund that had a 2009 YTD return of 6.34% ?

 


+1 

But, but, SD is a great indicator and easy to find.  It's not a guarantee but most times a pretty predictable one.  VWINX SD is lower than VWELX and it worked for decades.  When you deal with more complex funds SD can be off any time, remember PIMIX fiasco in 2018 and many consider them the best bond managers in the world.  IOFIX held well during the 20% loss of Q4 2018 but YTD was decimated.  VCIT=Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares which has IG bond rating is down 13.3 YTD.

So, if someone wants a reliable simple portfolio Bogle told us decades ago to use SP500 + Tot US bond index.  The key, of course, is to know when to take the risk and be flexible and when not.  CASH is a great category sometimes.

Dick is another very good trader and why he can be at a very high % in cash.  Most times he makes less than others because he can afford it and understands the risk.  When you have enough making less is secondary but protecting your portfolio is much more important.

I watch my portfolio very closely, it's my passion and hobby and trading big amounts is not a problem. It's a process I have been practicing for years.

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Re: 2020 - bond funds analysis

I'm just going to repeat something to which I've alluded or said outright before: SD is low if something has been working (has low volatility).  If it STOPS working, then the effective SD can be much different!  SD is more valid as an actual measure of risk the longer the period of time over which it is taken.  Even then, an SD during a Bull may not be realistic during a Bear.  Be careful to look beyond the numbers to what they actually MEAN!  Often a TRADER has more use for it than a B&H investor, imo.  It's just another data point.

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Re: 2020 - bond funds analysis

Basing fund purchase decisions on SD and other statistics is a waste of time and counter productive. I told Arriba that I ignore SD back when he was posting here. 

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Re: 2020 - bond funds analysis


@jmrdnc wrote:

Basing fund purchase decisions on SD and other statistics is a waste of time and counter productive. I told Arriba that I ignore SD back when he was posting here. 


Well, that's your choice but I have been using SD as one of my main criteria since 2000 and works well for me.  It also allow you to compare funds from a different category.  Just because SD is off during a meltdown doesn't mean it wrong.  When you deal with managed funds and complicated holdings it can be off by a lot.

You can't tell me that VWINX lower SD than VWELX is meaningless.

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Re: 2020 - bond funds analysis

We can assume that Corp bond will be downgraded and insurance/mutual funds and others who must hold investment-grade bonds will have to sell them and buy IG bonds.  That is another round of selling pressure.  Rapid changes make it difficult to predict what will happen and when.

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