Jeff Auxier's 4Q13 Letter

Charles

Whenever an asset class becomes popular, and thus overpriced, it is no longer safe.

I think he and Junkster would get along!

Auxier Report: Winter 2013

Ted

Dear Charles: Jeff is not quite 50/50 vs. the S&P 500.
Regards,
Ted


Auxier Focus Fund -
Investor Class Shares
S&P 500 Index Difference*
12/31/12-12/31/13 23.81% 32.39% -8.58
12/31/11-12/31/12 8.73% 16.00% -7.27
12/31/10-12/31/11 5.57% 2.11% 3.46
12/31/09-12/31/10 10.10% 15.06% -4.96
12/31/08-12/31/09 24.76% 26.46% -1.70
12/31/07-12/31/08 -24.52% -37.00% 12.48
12/31/06-12/31/07 5.71% 5.49% 0.22
12/31/05-12/31/06 11.75% 15.79% -4.04
12/31/04-12/31/05 4.58% 4.91% -0.33
12/31/03-12/31/04 10.73% 10.87% -0.14
12/31/02-12/31/03 26.75% 28.69% -1.94
12/31/01-12/31/02 -6.76% -22.10% 15.31
12/31/00-12/31/01 12.67% -11.88% 24.55
12/31/99-12/31/00 4.05% -9.10% 13.15
since inception 7/9/99 187.41% 72.74% 114.67

Vert

Reply to @Ted: Auxier has managed a lower risk fund. Over the last ten years compared to VFINX (the S&P 500):

AUXFX:

Avg. Return - 6.63
Std. Dev. - 10.91
Sharpe Ratio - 0.49
Sortino Ratio - 0.71


VFINX:

Avg. Return - 6.72
St. Dev. - 14.67
Sharpe Ratio - 0.41
Sortino Ratio - 0.57


He's done what he said he'd do, delivered stock-like returns with less volatility. We'll see about the future, but I've always liked Auxier.

Junkster

Reply to @Vert: This is neither here nor there. But being as I have always thought corporate junk bonds have always been the most underappreciated asset class out there........

Compared to AUXFX and VFINX above for the same 10 year time period my favorite junk bond fund WHIYX had an average return of 8.95% and standard deviation of 8.03%. And being so trend peristent ( up and down) as well as non-volatile makes them most amenable to simply timing strategies.

Caveat - WHIYX lost its long time manager a few months ago and corporate junk bonds (as opposed to muni junk bonds) are overpriced in the current market environment.