Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

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.
  • FSD: A Stable Absolute Return Bond Fund With A Monster Yield
    HI Sirs
    Mama's portfolio mostly fixed incomes /private corp bonds and majority in fidelity 2015, along with BND FBND, about 20s% cash.
    FSD maybe too risky for retired portfolio [as they say high risks high rewards]
    prob wont get it anytime soon
  • Monetta Core Growth Fund to change name
    Back to the future: "On August 28, 2018, Monetta Young Investor Fund changed its name to Monetta Core Growth Fund." Two-star rating which might say more about the state of the market and investor psychology than about the fund's discipline: 15 household names, 7% turnover, 17% 5-year returns.
  • 10-Year Closing in on 1.5% (OP) - Blows Right Past - Near 5% (30 months later) - Whee!
    Thought I’ve correct / embellish my above comments. From Randall Forsyth’s regular column in Barron’s (March 8), Forsyth mentions some instances where the U. S. government or Federal Reserve did control / manage longer term bond rates with some positive effect:
    - During WW II (at 2.5% on long bond)
    - 1961
    - 2011 & 2012
    I don’t have time to dig deeper into above, but thought in interest of accuracy I should mention them here. Others may wish to dig deeper.
    Forsyth cites skeptics who see any attempt by the Fed to hold down long rates artificially as an effort to limit the amount of interest the government pays on its growing debt. He also notes that Australia’s central bank has been aggresdively buying up long term bonds with some success (at holding rates down).
  • FSD: A Stable Absolute Return Bond Fund With A Monster Yield
    @johnN
    I will have to assume that you consider this fund to be appropriate for your Mom's retirement account, yes ???
    Only a meaningful holding of at least 25% of a total portfolio would be helpful for performance. Otherwise, one is just fiddling around with some money.
    So, might you sell 25% of BND or FBND in your Mom's account, to move to FSD?
    Not quite one's plain vanilla bond fund, eh?
    NOTE: FSD has outperformed BND or FBND for the past 6 months.
    FSD vs FBND from Jan 2018.........I chose this time frame, as 2018 through YTD 2021 has had several interesting market swings.
  • FSD: A Stable Absolute Return Bond Fund With A Monster Yield
    https://seekingalpha.com/article/4411564-fsd-stable-absolute-return-bond-fund-monster-yield
    Summary
    The biggest problem facing retirees today is an inability to generate reasonably stable income.
    FSD is an absolute return bond fund that boasts a remarkable 8.7% yield.
    The fund is well positioned to benefit from rising interest rates due to its short position in US Treasuries.
    The fund appears to normally cover its distribution, although it did fail to in 2020 due to some of the uniqueness of that year.
    The fund currently trades at a fairly attractive discount to net asset value, so the price appears to be right.....
    will look at this vehicle further
  • Why do you still own Bond Funds?
    related
    Don't stop believing in bonds
    MarketWatch
    ...And once you factor in a person's human capital, which Page argues acts more like a stock than a bond, a balanced portfolio with a healthy allocation...
    https://www.marketwatch.com/story/dont-stop-investing-in-bonds-2021-03-04
    Appears many folks still love bonds for diversification purpose/safety. The 20million dollars question [maybe] is how much should you be in bonds. For us about 20%, still have 15-20 yrs left before retirement.
  • Why do you still own Bond Funds?
    Yes, those are the funds up exactly 0.97%. As you noted, that's not helpful if one is comparing with a multi-fund portfolio.
    One isn't likely to achieve that return in either the aggregate or with an individual fund these days without using junk bonds. Out of 184 distinct funds returning at least 1% this year, only a dozen are investment grade. (M* screener).
    Even limiting one's focus to HY bonds, out of 175 distinct funds, only 66 (about 3/8) have returned at least 1% YTD.
  • Gold down / Settles below the key $1,800 mark in 2nd day of losses
    I've been holding some gold (IAU) since around Dec. 2018. Had about a 5% holding over most of that time until recently. I've been getting out slow (to slow maybe) the past couple months and putting that money into a broad basket commodity EFT, DBC (@ ~5% now) and putting some cash into an inverse dollar ETF, UDN.
  • Digging into Ark Innovation's Portfolio
    Barron’s Article: https://www.barrons.com/articles/arks-cathie-wood-disrupted-investment-management-shes-not-done-yet-51614992508 (may be paywalled - I accessed it through Apple News without a sub)
    One cautionary tidbit: her mentor at USC was Arthur Laffer of laughable Laffer Curve fame.
  • 10-Year Closing in on 1.5% (OP) - Blows Right Past - Near 5% (30 months later) - Whee!
    Related Article:
    Don’t put all your eggs in the yield curve control basket just yet
    Many believe that the recent rise in US treasury yields has crept up on the Fed policy radar and that the natural next step for the Fed is to hint at and eventually deliver a yield curve control (YCC) policy, just as it has been forced into so many easing moves in the past, once the market is sufficiently distressed to provide the excuse. Here, we look at why comprehensive YCC is not on the way any time soon.
    My favourite way to keep tabs of all of this remains the Gold price. If YCC was really on the way, gold would be $1,000 higher (as capped interest rates and emerging inflation would force real rates even deeper into the negative.) Instead, gold is losing altitude quickly as right now, real rates remain stubbornly bid, and this even before the incoming, monster $1.9 trillion Biden fiscal spending and $2-3 trillion in infrastructure spending to come later, before the EU starts allocating its new budget, and before China reverses its current tight monetary stance. In other words, we have only just started on this move higher in yields as the physical world is way too small for the fiscal spending on infrastructure, the green transformation, and supporting incomes for the lower half of the “K” in the K-shaped recovery.
    Gold is your indicator for yield curve control and real interest rates. Speculative equities and those valued at nosebleed multiples of even the steadiest of free cash flow yields could be another.
    home.saxo/content/articles/macro
    and,
    investopedia.com/what-is-yield-curve-control
    K- Shaped Recovery:
    A K-shaped recovery occurs when, following a recession, different parts of the economy recover at different rates, times, or magnitudes. This is in contrast to an even, uniform recovery across sectors, industries, or groups of people. A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession. This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter "K."
    k-shaped-recovery
  • 10-Year Closing in on 1.5% (OP) - Blows Right Past - Near 5% (30 months later) - Whee!
    Perspective. Rates are up a lot YTD(year-to-date) and...
    VFIAX (=SP500)...YTD=2.6%...1 year=29.3%...3 year=14.3%
    It's pretty known for months already that value is finally doing better. YTD SCHD=9.4%
    The usual, the stock market fluctuates, the rest is noise ;-)
  • Ignoring Energy Transition Realities: Some Unanswered Questions
    @Old_Joe,
    This caught my eye; I agree (and there are many other hurdles -- some known, some unknown -- to be surmounted as well):
    "What I have a great problem with are some of the blithe assumptions seemingly thrown out as "solutions", with little or no challenge from the standpoint of practicality."
    Are you familiar with the work of Vaclav Smil, an impressive Canadian energy specialist?
    I refer interested folks especially to his 2015 Power Density (MIT Press). A bit from the publisher's blurb on the book:
    Power density—the rate of energy flux per unit of area—is an important but largely overlooked measure. ...
    [Smil] argues that our inevitable (and desirable) move to new energy arrangements involving conversions of lower-density renewable energy sources will require our society—currently dominated by megacities and concentrated industrial production—to undergo a profound spatial restructuring of its energy system.
    https://mitpress.mit.edu/contributors/vaclav-smil
    As I recall, he writes that alternatives to fossil fuel, especially renewables, could provide only a small percentage of the power Americans use today, given existing setup.
    I wish there were some knowledgeable people guiding US policy aspirations in this arena.
    Also: Canada is a partner. Maybe all of North Am should be considered as a single energy space.
  • TMSRX - holding its own
    Hope my light-hearted remarks above didn’t offend. I’ve owned TMSRX nearly from the start. You’ll do better in a low cost equity fund over a longer time period. But for those with shorter time horizons or who are skeptical of current equity valuations it’s a decent alternative. If you read the prospectus you’ll realize the fund pursues 5 (or more) different investing styles. Last time I checked, each approach was being managed by a different person. The fund’s goal is to make money in any kind of equity market. Up, down, sideways.
    Derivatives? Of course. Shorts? Yes. Higher fees? Yes - but reasonable compared to peers. This is an area of investing where more funds fail than succeed. My modest investment rests partially on years of experience with T. Rowe and a belief that if anyone can make this approach work, they can. Notwithstanding the above - I fully expect the fund to experience some 5-10% down years.
  • TMSRX - holding its own
    TMSRX down .56% today. I know it's only one day's performance, but any ideas what happened?
    LOL - @Blitzer, The fund is not meant to be understood. :)
    Honestly, your guess or mine would be as good as anyone’s. I suspect they short some major equity indexes. Looks like the DJI tacked on over 500 points today.
    Newton’s Third Law? “For every action ...”
    Added: Than there’s the take on things of this sort from Peter, Paul, and Mary ...
    “It went "Zip" when it moved, and "Bop" when it stopped,
    And "Whirrr" when it stood still.
    I never knew just what it was and I guess I never will.”
  • Brandywine Global Investment Management, LLC to acquire Diamond Hill’s focused High Yield & Corp Cr
    update:
    https://www.sec.gov/Archives/edgar/data/1032423/000103242321000063/cchysupplement-03052021.htm
    497 1 cchysupplement-03052021.htm 497
    DIAMOND HILL FUNDS
    Diamond Hill Corporate Credit Fund
    Diamond Hill High Yield Fund
    (All Share Classes)
    Supplement dated March 5, 2021
    to the Prospectus, Summary Prospectus and Statement of Additional Information
    dated February 28, 2021
    A Special meeting of Shareholders of Diamond Hill Corporate Credit Fund and Diamond Hill High Yield Fund (each a “Fund” and collectively the “Funds”) is expected to be called on June 11, 2021, at 10:00 a.m. Eastern Time, to approve Agreements and Plans of Reorganization (each a “Plan” and collectively the “Plans”), which provide for the acquisition of all the assets and liabilities of the Diamond Hill Corporate Credit Fund by the BrandywineGLOBAL—Corporate Credit Fund in exchange for shares of beneficial interest of the BrandywineGLOBAL—Corporate Credit Fund and for the acquisition of all the assets and liabilities of the Diamond Hill High Yield Fund by the BrandywineGLOBAL—High Yield Fund in exchange for shares of beneficial interest of the BrandywineGLOBAL—High Yield Fund. Each acquiring fund is a series of Legg Mason Partners Equity Trust.
    On February 3, 2021, Diamond Hill Investment Group, Inc. announced that Diamond Hill Capital Management, Inc. ("Diamond Hill" or “Adviser”), its independent active asset manager subsidiary, had entered into a definitive agreement to enable Brandywine Global Investment Management, LLC (“Brandywine Global”), a specialist investment manager and subsidiary of Franklin Resources, Inc., to acquire the business of Diamond Hill’s high yield-focused High Yield and Corporate Credit Funds. The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions, including fund shareholder approval. Portfolio managers John McClain, CFA, and Bill Zox, CFA, will join Brandywine Global as part of the transaction.
    No sales loads, commissions, or other similar fee will be charged in connection with the fund reorganizations. Neither fund will bear any costs of the reorganizations. The costs of the fund reorganizations will be borne by Diamond Hill, Brandywine Global or their affiliates.
    The Diamond Hill Corporate Credit Fund and the Diamond Hill High Yield Fund will as soon as practicable prior to the closing date of the reorganizations, declare and pay to the shareholders of record of each respective fund, one or more dividends so that each will have distributed substantially all of the sum of (i) its investment company taxable income and (ii) its net tax-exempt income, if any.
    Only shareholders of record as of the close of business on March 31, 2021 are entitled to notice of, and to vote at, the Special Meeting. The Proxy Statement/Prospectus, Notice of Special Meeting, and the proxy card are first being mailed to shareholders on or about April 13, 2021.
    If shareholders of both funds approve the Plans, the reorganization is expected to occur on or about July 30, 2021, or such other date as the parties may agree. If shareholders of either fund do not approve the Plan for that fund, neither fund reorganization will occur, you will remain a shareholder of your fund, and the Adviser will consider whether to recommend an alternative plan to the Board of Trustees of Diamond Hill Funds.
    This document is not an offer to sell shares of either the BrandywineGLOBAL—Corporate Credit Fund or the BrandywineGLOBAL—High Yield Fund, nor is it a solicitation of an offer to buy any such shares or of any proxy.
    PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
  • TMSRX - holding its own
    TMSRX down .56% today. I know it's only one day's performance, but any ideas what happened?
  • Ignoring Energy Transition Realities: Some Unanswered Questions
    Bee's "Ignoring Energy Transition Realities as We Greenify" discussion is important, and addresses quite a number of aspects which I will not discuss here.
    I've taken the unusual step of opening a separate "chapter" on this subject, so to speak, because it seems to me that we, as a nation, are blithely stepping off a cliff without a whole lot of contemplation of the rocky landscape below.
    Bee's discussion, like most others on this subject, makes some assumptions that I seriously question. Those assumptions go to the very heart of the issue: is it even realistically possible to have this electric "Greenification"?

    ***************************************************************************
    As I write this, the last post in Bee's discussion is from kings53man, who contemplates a comforting scene of "thousands/M of electric vehicles [charging] in the night". This is absolutely not to poke fun at kings53man, because his scene is actually a pretty common picture promoted by the Green folks.
    Now, before the bricks start flying, let's establish this: I fully understand the climate dilemma, agree that humans likely are major contributors to the problem, and that "something" major needs to be done, and soon.
    What I have a great problem with are some of the blithe assumptions seemingly thrown out as "solutions", with little or no challenge from the standpoint of practicality. To keep things reasonably easy to contemplate, let's confine our picture to the United States.
    OK, postulate that in "x" number of years no more internal engine vehicles are going to be produced. Anyone wanting a vehicle will need to be driving electrics. Fine... one problem solved.
    Energy. It comes in lots of different packages. To list just four: coal, natural/synthetic gas, gasoline/diesel, electricity. To help visualize the issue, consider each energy package as a number of boxes- that number being relative to the amount of each being currently used. The total amount of energy needed is equal to the volume of all of the various boxes.
    Keeping things simple, lets assume that one box of energy is equal to any other box of energy, and that any kind of box may be transported over any kind of energy distribution network: a mental picture of boxes being transported across the country through trucks and tankers, or more weirdly, shoving their way through pipelines and thin electric grid wires.
    Now, the reality is that all of the presently existing energy transportation networks are pretty close to operational capacity. There's simply not a huge amount of extra room just waiting to be used on the existing electric grids or fuel pipelines.
    ***************************************************************************
    OK, coal is obviously a loser, and can be replaced for the most part by natural gas. So that means more boxes of natural gas, fewer of coal. This is actually under way, and seems pretty easy.
    BUT: natural gas is now deemed unacceptable also, and the proposed premise is to substitute boxes of electricity. Now things are getting a bit more complicated. First of all, the electrical distribution grids of the United States do not have the capacity to transmit a significant additional number of energy boxes.
    Let's step back for a moment and try to visualize a couple of huge mountains of energy boxes. First, those boxes needed to support our national vehicle fleets. Second, the boxes needed to supply heating and cooking for homes and workplaces. It's being proposed that all of those boxes are to be transported somehow over our already stressed electric grids. To me, this is a typical picture of political operators who haven't the faintest idea of the actual practical realities of electrical transmission. Very much like the politicians who are responsible for the Texas power grid network.
    Let's think for a moment about the actual efficiency of various energy types. Yes, electricity can certainly be used to generate heat, and fairly easily too. Unfortunately, it takes significantly more than one box of electricity to equal the heat energy in one box of natural gas energy. In other words, electricity is simply less efficient than natural gas to transport or generate heat.
    Well, that's something that obviously needs more thought, so let's look instead at vehicles. Again, to keep things fairly simple, let's ignore large trucks and similar equipment, and just consider the average automotive vehicle.
    OK, first, lets look at the mountain of energy boxes now supplied by gasoline or diesel fuels, and try to visualize those boxes also being stuffed through the national electric energy distribution systems. H'mmm- that's quite a puzzler also. Existing grids were largely built when the country was less populated, and it was a lot easier to construct major infrastructure without lawsuits and protests. Not suggesting that situation was ideal- simply stating a fact.
    When pundits and promoters talk about the "electric grid system", most of us compose a mental picture of huge steel pylons with heavy electric wires marching across the land. We think something like "well, those really aren't all that pretty, but then the odds of having one of those in my backyard are pretty slim, and most of that stuff is someplace else anyway".
    Really? The next time you're out and about take a moment and look at the wiring on any overhead electric distribution system. Try to imagine having to either replace most of those wires with much thicker wires, or alternately, to double or triple the number of wires. Take a close look at some of those power poles, and note the large metal enclosures which are mounted there. Those are transformers, and they will also need to be either much larger, or have many more of them. Speaking of the power poles themselves- do you notice that many of them are already pretty full of stuff, and that there really isn't a lot of room for more stuff?
    Well, perhaps you're fortunate, and live in a nice middle-class area where everything is neatly underground and out of sight. Sorry- get prepared for a lot of digging and streetwork- all of those systems will need substantial upgrades also.
    Wow! And how exactly is all of this going to be paid for?
    ***************************************************************************
    Well, let's assume some sort of miracle on that, and consider how each new electric vehicle is actually going to receive it's energy packages via the grid.
    Right! We're back to looking at "thousands/M of electric vehicles will charge in the night". Sounds easy enough. It's not too difficult to image a cozy scene of middle-class detached homes with one or two electric vehicles happily guzzling boxes of electric energy while their owners sleep away the night. OK, that's under control.
    But what about the huge number of Americans who live in apartments, multi-family housing, or who need to park their vehicles on the street because they don't have suitable garage space?
    And, thinking about this a little more, exactly what kind of plugs and extension cords will all of this need? The present vehicle charging systems don't just plug into the nearest 120 volt outlet with a #14 extension cord from Home Depot. No, each charging station needs to be installed with a power source that is pretty heavy-duty and able to handle the increased load.
    Has anyone, anywhere, even begun to think through the financial implications of any of this? We have a substantial percentage of Americans who even now can barely keep food on the table. And they are going to have to install an expensive charging system in older homes which would need significant wiring upgrades to even accommodate this?
    So now we are telling those people "sorry- but having a vehicle is just for the better-off folks"?
    ***************************************************************************
    I've deliberately only touched on a few of the aspects of this whole thing. Having spent much of my career in electronics, I naturally tend to look at things from a somewhat technical point of view, and fully understand that others may not do so. But, as demonstrated here in California, and also so very recently in Texas, placing ignorant political activists of any persuasion in charge of problems requiring some degree of interest in and understanding of technical reality is not particularly helpful.