Substitute for RPHYX- PING Charles

MarkM

Hi Charles-

There's a discussion below pinging David asking whether RSIVX can be used as a money market substitute like the now closed RPHYX. Rather than wade into that before David has a chance to answer (poor form I think), I was wanting to know whether you had come across anything that you could fairly characterize as a somewhat viable alternative to RPHYX to suggest in this regard. Frankly, I am at a loss here.

Best,

Mark

Dex

Are you specifically asking about the NAV and how it would perform in a down stock market and/or increase in interest rates?

David_Snowball

Hi, Mark.

For March, I'll extend by a bit my post on the charms of one-star funds. If turns out that the combination of "short-term" and "high-yield" leads to some funds with interesting performance profiles. Below is the chart for RPHYX (blue), Intrepid Income (ICMYX, green) and Wells Fargo Short-Term High-Yield (STHBX, yellow) against the high-yield (orange) and short-term (magenta) peer groups.



I don't know that they're substitutes, but I am interested in learning a bit more.

For what that's worth,

David

MarkM

Reply to @David_Snowball: Hi David- Thanks. The Intrepid offering piques my interest in this regard and I think I will research that this weekend, especially in regard to its portfolio composition.

Best,

Mark

expatsp

Reply to @MarkM: ICMYX lost 12.5% in 2008. It made it back and more the next year, and maybe David is right and 2008 was a once in a lifetime event (let us hope!) but I personally want my cash substitutes to be near bulletproof, or they belong in a different part of my portfolio. Lots of boring core bond funds managed a positive 2008.

bee

Reply to @expatsp: I'm playing around with this 2008 mutual fund ranking list via Forbes. You can rearrange the list by clicking on the column headings. I like fitering the first two columns and examining the funds that have performed well in both up and down markets.
forbes.com/lists/2008/42/pf-funds-cz_funds208_Mutual-Fund-Survey_GradeDn.html

A skilled manager (of a mutual fund) that outperforms in both up and down markets seems worthy of consideration. Separating "lucky" from "unlucky" and "skilled" from "unskilled" is often the grail we seek.

Here's a study done on the topic during the years just before and after the Tech bubble:
rhsmith.umd.edu/faculty/rwermers/FDR_published.pdf

MarkM

Reply to @expatsp: Yes, I saw that. A stronger showing was turned in byOSTIX in that regard. And still, after looking just superficially at it, I agree that this fund may need to go in a different risk bucket.

Lets see if Charles chimes in at some point on anything he has seen. Sit has a fine short term government fund, but it has struggled in the last year.

sym

In terms of the drawdown characteristics since the inception 6/1/12, PAIDX is compatible to RPHYX. Unfortunately, its return (2.13% since 6/1/12) is much worst than RPHYX (6.26% since 6/1/12).

MikeM

FWIW, was in the same boat as you looking for an alternative to RPHYX. Chose WDHYX after reading David's commentary a couple months ago.

MarkM

Reply to @MikeM: Was concerned not for myself, but for others who missed out on RPHYX, including the poster who was asking about RSIVX as a MM fund substitute (Ack!) Thanks for the nice add here.
Regards,
Mark

mrdarcey

I'm not certain, but would FPNIX fall into this category as well? Doesn't seem to return quite as much, but has similar volatility and an absolute mandate of capital protection.

msf

Reply to @mrdarcey:
Thanks for the reminder. There was a similar thread (alternatives to RPHYX) a year ago where I mentioned FPNIX.

http://www.mutualfundobserver.com/discuss/index.php?p=/discussion/5865/looking-for-another-fund-somewhat-like-rphyx-to-fill-a-conservative-part-of-portfolio/p1

I feel they serve different niches, though I would likely say the same of any of the funds mentioned here vis a vis RPHYX. (And I think you've characterized FPNIX well.) Here is the thread with those thoughts:

http://www.mutualfundobserver.com/discuss/index.php?p=/discussion/5680/fpa-funds-eliminate-front-end-sales-charges/p1

MarkM

Reply to @msf: Thanks for that link. I wasn't aware of that discussion.

I am using Riverpark Short Term HY to hold cash for the family's short term reinvestment needs. Works extremely well for that.

To address a point made about OSTIX, I would consider its risk profile more similar to RSIVX, and I know from speaking with him Mr. Sherman does also.

Best,

Mark