cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Valued Contributor

Re: 2020 - bond funds analysis


@yogibearbull wrote:

Muni fund inflows in 2019 were the highest since 2009, so some investors heard about them.   https://www.cnbc.com/2020/01/02/reuters-america-refile-update-1-u-s-muni-bond-funds-post-record-infl...


I was thinking of HY muni in particular. I'm not sure that I was really attuned to these prior to around 10 years ago. I got into CEFs and municipal CEFs somewhat intensively at the Whitney Bottom (I am now completely out), and it was due to that that I started to look more deeply into HY muni. Now I invest in HY muni OEFs.

0 Kudos
Highlighted
Participant ○○○

Re: 2020 - bond funds analysis

As of 11/30 VCFAX was holding over 32% in cash. Seems excessive, but perhaps in line with wanting to keep its vol low. I am thinking of selling it in a few days when I can do so without paying $49 for early redemption. According to Sharpcharts it has been less than zero for the 1,2,3 and 4 mo.

@FD1001 Thanks for the link on preferreds. Good article.

0 Kudos
Highlighted
Contributor ○○○

Re: 2020 - bond funds analysis

I get what you are saying but personally I am getting tired of trying to ride the crest of any bond OEFs wave and own the latest hot fund. I will continue to hold it and try to ignore the price gyrations. I believe good funds and good management will prevail. Looking at the website the fact sheet says 4.7% cash/treasuries dated 11/30/19.


@archer wrote:

As of 11/30 VCFAX was holding over 32% in cash. Seems excessive, but perhaps in line with wanting to keep its vol low. I am thinking of selling it in a few days when I can do so without paying $49 for early redemption. According to Sharpcharts it has been less than zero for the 1,2,3 and 4 mo.

 


 

Highlighted
Valued Contributor

Re: 2020 - bond funds analysis


@archer wrote:

As of 11/30 VCFAX was holding over 32% in cash. Seems excessive, but perhaps in line with wanting to keep its vol low. I am thinking of selling it in a few days when I can do so without paying $49 for early redemption. According to Sharpcharts it has been less than zero for the 1,2,3 and 4 mo.

@FD1001 Thanks for the link on preferreds. Good article.


VCFAX has 4.7% in cash.  Always google a fund and go to its site(link).  VCFAX holdings is mainly in securitized bonds and how PIMIX used to look years ago but without Pimco other manipulations. 

For performance do not look at its NAV but M* chart (link)

Use this link in the future to look for funds + add more funds on the chart to compare

http://quotes.morningstar.com/chart/fund/chart?t=VCFAX&region=usa&culture=en-US

 

0 Kudos
Highlighted
Participant ○○○

Re: 2020 - bond funds analysis


@Gary1952 wrote:

I get what you are saying but personally I am getting tired of trying to ride the crest of any bond OEFs wave and own the latest hot fund. I will continue to hold it and try to ignore the price gyrations. I believe good funds and good management will prevail. Looking at the website the fact sheet says 4.7% cash/treasuries dated 11/30/19.


@archer wrote:

As of 11/30 VCFAX was holding over 32% in cash. Seems excessive, but perhaps in line with wanting to keep its vol low. I am thinking of selling it in a few days when I can do so without paying $49 for early redemption. According to Sharpcharts it has been less than zero for the 1,2,3 and 4 mo.



Gary, I tend to agree that chasing performance is typically a bad strategy.

Conversely (as a counter-argument), if you don't label yourself an active "trader", you lose all opportunity to try and convince others you were always in the "hot" funds. How else can you realistically say you made 12% in a year when bond funds sectors returned:

  • corporate bonds 13.4%
  • high-yield bonds 12.6%
  • multi-sector 9.7%
  • intermediate core 8.2%
  • treasuries 7.6%
  • bank loan 7.4%
  • short-term 4.7%

So my sage advice is always pick winners!

P.S. You would also lose the opportunity to tell others what fund they should have been in <after the fact>

Highlighted
Explorer ○○

Re: 2020 - bond funds analysis

I think MHMAX in the HY Munis list should be NHMAX.

0 Kudos
Highlighted
Explorer ○○

Re: 2020 - bond funds analysis

FD,

For the SD<1.5=IISIX,TSIIX you are correct if you use 2017-2019. If you use 2013-2019 I get a SD of 2.44.  Thank you!

 

0 Kudos
Highlighted
Contributor ○○○

Re: 2020 - bond funds analysis

Bazinga!


@Bazinga wrote:

@Gary1952 wrote:

I get what you are saying but personally I am getting tired of trying to ride the crest of any bond OEFs wave and own the latest hot fund. I will continue to hold it and try to ignore the price gyrations. I believe good funds and good management will prevail. Looking at the website the fact sheet says 4.7% cash/treasuries dated 11/30/19.


@archer wrote:

As of 11/30 VCFAX was holding over 32% in cash. Seems excessive, but perhaps in line with wanting to keep its vol low. I am thinking of selling it in a few days when I can do so without paying $49 for early redemption. According to Sharpcharts it has been less than zero for the 1,2,3 and 4 mo.



Gary, I tend to agree that chasing performance is typically a bad strategy.

Conversely (as a counter-argument), if you don't label yourself an active "trader", you lose all opportunity to try and convince others you were always in the "hot" funds. How else can you realistically say you made 12% in a year when bond funds sectors returned:

  • corporate bonds 13.4%
  • high-yield bonds 12.6%
  • multi-sector 9.7%
  • intermediate core 8.2%
  • treasuries 7.6%
  • bank loan 7.4%
  • short-term 4.7%

So my sage advice is always pick winners!

P.S. You would also lose the opportunity to tell others what fund they should have been in <after the fact>


 

0 Kudos
Highlighted
Explorer ○○

Re: 2020 - bond funds analysis

Gary1952 wrote, So my sage advice is always pick winners!

So NOW you tell me! I wish I would have know that 40 years ago!  ;>)

 

0 Kudos
Highlighted
Valued Contributor

Re: 2020 - bond funds analysis

Observation: HY Munies and especially the 3 funds I like (NHMAX,OPTAX,ORNAX) already had a great week with over 0.45% performance. HY munis behave better than your typical core bond fund in the last several years while rates movements have less effect on them. 

0 Kudos
Highlighted
Participant ○○○

Re: 2020 - bond funds analysis

Muni funds will take a hit if/when interest rates go up, but I’ve found it’s easier to limit interest rate risk with the bond funds in my retirement accounts and maintain a full allotment to muni bond funds in my taxable account. There are better options for bond funds with both limited interest rate exposure and good returns in taxable bond funds vs. muni bond funds, so I have pretty much allocated my interest rate exposure risk to my taxable account, and pick bond funds without too much interest rate risk for my retirement accounts.

0 Kudos
Highlighted
Valued Contributor

Re: 2020 - bond funds analysis


@PN wrote:

Muni funds will take a hit if/when interest rates go up, but I’ve found it’s easier to limit interest rate risk with the bond funds in my retirement accounts and maintain a full allotment to muni bond funds in my taxable account. There are better options for bond funds with both limited interest rate exposure and good returns in taxable bond funds vs. muni bond funds, so I have pretty much allocated my interest rate exposure risk to my taxable account, and pick bond funds without too much interest rate risk for my retirement accounts.


Generally, you are right about retirement accounts and why I mentioned several OTHER options.

But,

1) Rates are not going up quickly anytime soon

2) You said "There are better options for bond funds with both limited interest rate exposure and good returns in taxable bond funds vs. muni bond funds"  Any tickers in mind?

0 Kudos
Highlighted
Participant ○○○

Re: 2020 - bond funds analysis


@FD1001 wrote:

@PN wrote:

Muni funds will take a hit if/when interest rates go up, but I’ve found it’s easier to limit interest rate risk with the bond funds in my retirement accounts and maintain a full allotment to muni bond funds in my taxable account. There are better options for bond funds with both limited interest rate exposure and good returns in taxable bond funds vs. muni bond funds, so I have pretty much allocated my interest rate exposure risk to my taxable account, and pick bond funds without too much interest rate risk for my retirement accounts.


Generally, you are right about retirement accounts and why I mentioned several OTHER options.

But,

1) Rates are not going up quickly anytime soon

2) You said "There are better options for bond funds with both limited interest rate exposure and good returns in taxable bond funds vs. muni bond funds"  Any tickers in mind?


No other suggestions other than what’s been discussed – In my retirement accounts I own - JMSIX, IISIX, VCFIX, SEMMX and PIMIX and they have somewhat limited interest rate exposure.

But I used to hold DBLTX and also my company 401K bond fund (no ticker), which would take significant hits whenever interest rates went up.

0 Kudos
Highlighted
Valued Contributor

Re: 2020 - bond funds analysis


@chang wrote:

@FD1001 wrote:


HY Munis continues to be a great category regardless of rate changes.


Ain't that the truth. And they get very little discussion here. My muni exposure is roughly 3:1 in HY:IG munis. The HY is oddly "bar-belled" between PHMIX (aggressive) and VWALX (conservative). The IG is split between PFMIX and VWIUX.


Oops, actually my HY:IG muni split is a little more than 4:1. Too late for me to edit the previous post.

Highlighted
Explorer ○

Re: 2020 - bond funds analysis

Thanks, FD, for starting the 2020 thread. I like the breakout of multisector funds based on the portfolios. I see that you are tracking GTO. I made a minimum investment in GTO in the late fall. I hope the smaller AUM will make it more nimble that funds such as BOND and FBND.

0 Kudos
Highlighted
Explorer ○○

Re: 2020 - bond funds analysis

Thanks for the 2020 thread, FD!

I really appreciate the research on bonds that you provide in your postings. Have a great 2020!

0 Kudos
Highlighted
Valued Contributor

Re: 2020 - bond funds analysis

My HY Munis fund opened the year with a bang (already 0.7+% in just a week). All my taxable is invested in that fund. Time for me to add more money to HY Munis in IRAs, just like I did last year because it's better than Multisector funds.
See YTD (chart)

0 Kudos
Highlighted
Participant ○○○

Re: 2020 - bond funds analysis


@FD1001 wrote:

My HY Munis fund opened the year with a bang (already 0.7+% in just a week). All my taxable is invested in that fund. Time for me to add more money to HY Munis in IRAs, just like I did last year because it's better than Multisector funds.
See YTD (chart)


If I may pick your brain on this...ORNAX leads in your linked chart YTD, but not 1 and 3 month. Are you buying more based only on YTD? Seems like a short time frame. What else about it looks promising? 

My sampling of Munis 3 yr SD and Sharpe look fine for bond funds but it seems there is a potential for great risk. In 2008 some munis dod worse than the S&P. Link I haven't sampled a lot of them for charting so maybe I randomly picked the worst in my chart. 

0 Kudos
Highlighted
Valued Contributor

Re: 2020 - bond funds analysis


@archer wrote:

@FD1001 wrote:

My HY Munis fund opened the year with a bang (already 0.7+% in just a week). All my taxable is invested in that fund. Time for me to add more money to HY Munis in IRAs, just like I did last year because it's better than Multisector funds.
See YTD (chart)


If I may pick your brain on this...ORNAX leads in your linked chart YTD, but not 1 and 3 month. Are you buying more based only on YTD? Seems like a short time frame. What else about it looks promising? 

FD: I just present ideas, you can do with it what you want.  The momentum looks pretty good.  HY Muni as a sector is a pretty good one for years now.

My sampling of Munis 3 yr SD and Sharpe look fine for bond funds but it seems there is a potential for great risk. In 2008 some munis dod worse than the S&P. Link I haven't sampled a lot of them for charting so maybe I randomly picked the worst in my chart. 

FD: "potential for great risk" exist all the time.  I don't invest based on 2008 since many categories lost money in that year. 


 

0 Kudos
Highlighted
Contributor ○○○

Re: 2020 - bond funds analysis

A little more info on munis for 2020: https://www.bloomberg.com/news/audio/2019-12-26/muni-bond-party-should-continue-in-2020-bi-s-kazatsk...

I picked NVHAX up on 1/2/2020. More conservative than the high flyers.


@archer wrote:

.................My sampling of Munis 3 yr SD and Sharpe look fine for bond funds but it seems there is a potential for great risk. In 2008 some munis dod worse than the S&P. Link I haven't sampled a lot of them for charting so maybe I randomly picked the worst in my chart. 


 

Announcements

Morningstar is here to help you respond to the Coronavirus crisis.