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Participant ○○

Re: 2020 - bond funds analysis

FD, Just to let you know that my EIFAX/SPFLX trade is working out pretty good. Remember we discussed it about a month or two ago and you weren't thrilled about them at that time? EIFAX, in particular, is very strong!

I thought I had to shuffle it to other sectors if they really lag but the bank loans are breathing life again.

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Re: 2020 - bond funds analysis


@RainGater wrote:

FD, Just to let you know that my EIFAX/SPFLX trade is working out pretty good. Remember we discussed it about a month or two ago and you weren't thrilled about them at that time? EIFAX, in particular, is very strong!

I thought I had to shuffle it to other sectors if they really lag but the bank loans are breathing life again.


This is what I said on 10/24/2019 "SPFLX stinks and I don't care why nor do I go against the trend or better funds"  and on 10/25/2019 "This is why I used to own EIFAX and not SPFLX."

SPFLX still lags against EIFAX since 10/25/2019 by 1.1% in less than 3 months and it still lags the category for 3 months.

The BL category had a good run in the last 3 months since it correlates to stocks and HY.  You can continue to own it if you like :-)

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Re: 2020 - bond funds analysis


@FD1001 wrote:

The BL category had a good run in the last 3 months since it correlates to stocks and HY.  You can continue to own it if you like :-)


That's why I own both.  When I announced that I am going to buy both the funds as they were pummeled at that time (value investing), you were making fun of me. Now, you say that it has a good run the past 3 months and that's exactly why/when I purchased it. ;)

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Re: 2020 - bond funds analysis


@RainGater wrote:

@FD1001 wrote:

The BL category had a good run in the last 3 months since it correlates to stocks and HY.  You can continue to own it if you like :-)


That's why I own both.  When I announced that I am going to buy both the funds as they were pummeled at that time (value investing), you were making fun of me. Now, you say that it has a good run the past 3 months and that's exactly why/when I purchased it. ;)


You conveniently disregarded my first point.   

You posted the following: What's going on with SPFLX/SPFPX?(link)

I said: "Simply put, SPFLX stinks and I don't care why"

SPFLX continues to lag

==================================

Second point: when to buy

There are 2 ways to look at this when something goes down and you buy it.

It can continue to go down (falling knives) or you can wait and buy it after it starts to go up which IMO is safer based on many previous trades.

If you look at the chart below you bought it at point 1 or prior to that, SPFLX continues to fall. There is no way to know how much and how long.  I prefer to buy at point 2 when I see a strat of momentum

spflx.PNG

BTW, thanks for reminding me about EIFAX.  It looks like it's still going  :-)

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Re: 2020 - bond funds analysis


@FD1001 wrote:


You conveniently disregarded my first point.   

SPFLX continues to lag

...

If you look at the chart below you bought it at point 1 or prior to that, SPFLX continues to fall. There is no way to know how much and how long.  I prefer to buy at point 2 when I see a strat of momentum


I didn't disregard anything and I understand that SPFLX, from the lofty standards that it set itself when it was going gangbusters with a tiny SD in the past, didn't perform to its true potential. Maybe, the managers messed up by picking up some duds that caused this drop in NAV. I get that and that's why it's trading so low. That said, it still performed much better than lots of other OEFs since I purchased it.

There are two ways to buying: one is value based investing, which is what I did, and the other one is to buy at the start of momentum, which is hard to predict as hindsight will always look rosy. We cannot go back in time and see whether the momentum has started or not. 

Btw, the momentum can fail too as there is always a dead cat bounce and both the theories can/will fail if the fund had picked significant eroding assets. That's why I mentioned that I will wait for 3 months and if it doesn't work out, cut my losses and lick my chops and move on.

Anyways, my last post on this topic as I don't want to bore others with this drivel ;)

 

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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)


Hope you’re right! Muni Yugo racing, California style, as of Wednesday close -

Nuveen CA High Yield Municipal Bond A - NCHAX

11.60% TR for 2019 / 1.16% TR YTD

BlackRock California Muni Opps Inv A – MECMX

6.16% TR for 2019 / 0.58% TR YTD

Fidelity California Ltd Trm Tax-Free Bd - FCSTX

4.07% TR for 2019 / 0.31% TR YTD

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Re: 2020 - bond funds analysis

I just finished watching a Fidelity webinar aired today on bond outlook for 2020. It was quite positive on munis for 2020. One thing that stood out to me was that over the past 10 years, as shown on one of their charts, the amount of muni debt has remained pretty stable whereas tax income has increased substantially. Bottom line, when investing in munis, you are lending to entities with less debt rather than more as in the case of corporate debt. I don't know how significant this is for us as investors, but given the choice of who to lend money to, I would prefer to not lend to someone with more debt than less. Simply put, municipalities are financially in better shape than they were 10 years ago, and that progression has been steady. 

Hopefully my take-away is accurate. Anyone else watch the webinar today? Unfortunately I didn't do the downloads of the webinar for reference. (which we are not supposed to post here anyway IIRC)

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Re: 2020 - bond funds analysis


@RainGater wrote:

There are two ways to buying: one is value based investing, which is what I did, and the other one is to buy at the start of momentum, which is hard to predict as hindsight will always look rosy. We cannot go back in time and see whether the momentum has started or not. 

Btw, the momentum can fail too as there is always a dead cat bounce and both the theories can/will fail if the fund had picked significant eroding assets. That's why I mentioned that I will wait for 3 months and if it doesn't work out, cut my losses and lick my chops and move on.

 

 


My momo trades have been working pretty well over the years. Dead cat bounce is a lot more common in stocks and much less with bond OEFs.

Several ideas I use:

1) Multisector + Nortad are my main categories.  I will have the best 2-3 momo funds in this category by selecting from a pre-selected risk/reward option...just to name several VCFAX,PIMIX,JMUTX,JMSIX,PUCZX,EIXIX,IOFIX

2) For specific categories, I'm usually in one fund from the following HY Munis: OPTAX,ORNAX,NHMAX.   Bank loan: usually EIFAX and never SPFLX. BL is a unique category for a ST trade and why I'm trying to make the most and get out.

Examples: So, if I owned PIMIX on in 07/2019, the minute I see a 0.5% difference and especially when every many other funds acting the same and against a fund I own I sell

pimix 1 sign.PNG

Look what happened 2-3 months later PIMIX had a better momo than others

pimix 2 sign.PNG

Looking for BL fund, suppose I want to compare EIFAX to SPFLX.  It's an easy choice for me.  SPFLX lags the category while EIFAX leads in this chart.

spflx.PNG

None of the above is recommended to anybody. 

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Re: 2020 - bond funds analysis


@PN 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)


Hope you’re right! Muni Yugo racing, California style, as of Wednesday close -

Nuveen CA High Yield Municipal Bond A - NCHAX

11.60% TR for 2019 / 1.16% TR YTD

BlackRock California Muni Opps Inv A – MECMX

6.16% TR for 2019 / 0.58% TR YTD

Fidelity California Ltd Trm Tax-Free Bd - FCSTX

4.07% TR for 2019 / 0.31% TR YTD


You are now on my list of posters I will not answer.

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Re: 2020 - bond funds analysis


@archer wrote:

I just finished watching a Fidelity webinar aired today on bond outlook for 2020. It was quite positive on munis for 2020. One thing that stood out to me was that over the past 10 years, as shown on one of their charts, the amount of muni debt has remained pretty stable whereas tax income has increased substantially. Bottom line, when investing in munis, you are lending to entities with less debt rather than more as in the case of corporate debt. I don't know how significant this is for us as investors, but given the choice of who to lend money to, I would prefer to not lend to someone with more debt than less. Simply put, municipalities are financially in better shape than they were 10 years ago, and that progression has been steady. 

Hopefully my take-away is accurate. Anyone else watch the webinar today? Unfortunately I didn't do the downloads of the webinar for reference. (which we are not supposed to post here anyway IIRC)


I let my managers take the lead on that.  As long as my funds make money I'm in.

But, in the last several years I have noticed that Munis are not doing well in Sep-Oct. With that in mind, I sell at least half at the end of Aug and buy shorter duration Munis such as NVHAX and watch the trend carefully.

None of the above is recommended to anybody. 

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Re: 2020 - bond funds analysis


@FD1001 wrote:

@PN 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)


Hope you’re right! Muni Yugo racing, California style, as of Wednesday close -

Nuveen CA High Yield Municipal Bond A - NCHAX

11.60% TR for 2019 / 1.16% TR YTD

BlackRock California Muni Opps Inv A – MECMX

6.16% TR for 2019 / 0.58% TR YTD

Fidelity California Ltd Trm Tax-Free Bd - FCSTX

4.07% TR for 2019 / 0.31% TR YTD


You are now on my list of posters I will not answer.


No insult was intended. These are the three muni OEF funds I own, and there are a lot of people who live in states with tax laws that make state specific munis appropriate.

If I wanted to insult you I would probably say that I think you're a knucklehead to buy them in an IRA  : )

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Re: 2020 - bond funds analysis


@PN wrote:

@FD1001 wrote:

@PN 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)


Hope you’re right! Muni Yugo racing, California style, as of Wednesday close -

Nuveen CA High Yield Municipal Bond A - NCHAX

11.60% TR for 2019 / 1.16% TR YTD

BlackRock California Muni Opps Inv A – MECMX

6.16% TR for 2019 / 0.58% TR YTD

Fidelity California Ltd Trm Tax-Free Bd - FCSTX

4.07% TR for 2019 / 0.31% TR YTD


You are now on my list of posters I will not answer.


No insult was intended. These are the three muni OEF funds I own, and there are a lot of people who live in states with tax laws that make state specific munis appropriate.

If I wanted to insult you I would probably say that I think you're a knucklehead to buy them in an IRA  : )


Too bad he can't answer you anymore about the knucklehead claim...  

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Re: 2020 - bond funds analysis

kzug

No answer necessary. FD zigs and zags based upon short term trends vs. most of the rest of us who are longer term. But his analysis of bond funds is beneficial for all of us.

And in the past other posters have contributed whatever insights they may have. No tit for tat, just keep the info flowing.

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Re: 2020 - bond funds analysis

FD1001,

I used the funds I have in my IRA in the portfolio visualizer. My allocation is 20% in each: PIMIX, JGIAX, JMUTX,IOFIX, PUCZX

Result of PV analysis : CAGR = 7.46%, Std dev = 2.09, Sharpe ratio = 2.80.

I have adjusted to this portfolio from the beginning of this year. I will wait for 3 months adjust.

SRT

 

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Re: 2020 - bond funds analysis


@sthanga wrote:

FD1001,

I used the funds I have in my IRA in the portfolio visualizer. My allocation is 20% in each: PIMIX, JGIAX, JMUTX,IOFIX, PUCZX

Result of PV analysis : CAGR = 7.46%, Std dev = 2.09, Sharpe ratio = 2.80.

I have adjusted to this portfolio from the beginning of this year. I will wait for 3 months adjust.

SRT

 


Pretty much in line with what I have said in my OP..." IOFIX,EIXIX,VCFAX,PIMIX,JMUTX,JMSIX/JGIAX,PUCZX. IMO these are top Multi-sector funds and can be used by most investors with different risk tolerance. If you want lower volatility funds then consider SEMMX+IISIX.

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Re: 2020 - bond funds analysis

Why I don't invest in intermediate-core/intermediate-core plus funds. These funds are great as ballast funds. If you have a higher % in stocks they make sense. I'm a retiree mostly invested in bond funds because they meet my goals of performance + lower risk/volatility + higher income.
Rates are continually going down in the last several years and especially in 2019 and why these funds look really good now.
But, rates have been stabilizing and it seems the new range for the 10 year treasury will be 1.5-2.25%. A typical fund in that category yield is around 2.5-3.2%.
What does the above mean?
If rates are not going down much + yield is around 3% the likelihood of these funds performance in the next several years would be around 3%(maybe 3.5%).
With that in mind, I prefer to invest in my favorite Multisector+NonTrad funds which I already mentioned in my first post. They also pay much higher yield at 4+% and generally, a higher yield gets you a higher future performance but you always should check the risk attributes too.
IOFIX,EIXIX,VCFAX,PIMIX,JMUTX,JMSIX/JGIAX,PUCZX-these are top Multi-sector funds and can be used by most investors with different risk tolerance. If you want lower volatility funds then consider SEMMX+IISIX.
I think SEMMX+IISIX may generate 4% annually while the other 7 funds may generate 4.5-6%.
If rates go up then intermediate-core funds performance will get even worse sinse they correlate to rates a lot more than Multisector+NonTrad funds.

A simple 3 year (chart) of 2 good intermediate-core plus funds (DODIX,USIBX) VS Multisector(JMUTX) shows how DODIX, USIBX had lower performance + worse risk attribiutes.
You can easily see how DODIX,USIBX  are effected by rates in 2018 and 09/2019.

Funds 1-26.PNG

Portfolio Vis numbers is another proof, see (link). It shows that JMUTX has better SD(volatility), Max Draw and why Sharpe+Sortino are much better.  I call it my "FREE LUNCH"  :-)

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
USIBX5.24% 2.56%11.06%-0.99%-1.68% 1.43.1
DODIX4.59% 2.02%9.75%-0.31%-1.34% 1.473.29
JMUTX6.01% 1.90%10.90%0.44%-1.09% 2.255.94



My cloudy crystal ball says that the next several years may look like the previous 5 years(link) but performance will be lower for USIBX,DODIX,JMUTX. So, instead of 5.1% for JMUTX I can see 4.5% and around 3-3.2% for DODIX,USIBX.
Lastly, if you are willing to take a bit more risk and maybe play some momentum you can get 5-6%  :-)

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Re: 2020 - bond funds analysis


@FD1001 wrote:

Why I don't invest in intermediate-core/intermediate-core plus funds. These funds are great as ballast funds. If you have a higher % in stocks they make sense. 

 

I  use a few to balance the effects of an aggressive (riskier) bond portfolio, related to credit quality and duration as well as interest rates. Added FBND recently.


 

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Re: 2020 - bond funds analysis

Just checked my January YTD balance at Vanguard, portfolio increased 5.5%.  Month has five trading days to go until EOM distributions.  Portfolio there is almost entirely fixed income and cash. Exceeded my all time high of two years ago about three months earlier than I estimated.

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Re: 2020 - bond funds analysis


@jmrdnc wrote:

Just checked my January YTD balance at Vanguard, portfolio increased 5.5%.  Month has five trading days to go until EOM distributions.  Portfolio there is almost entirely fixed income and cash. Exceeded my all time high of two years ago about three months earlier than I estimated.


Are you sure? Only growth stock funds have done 5%+ YTD. 

YBB
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Re: 2020 - bond funds analysis

I triple checked but it doesn't seem right. No  additional cash was deposited in two years. I'll check again.

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