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Back when I first invested in ostix it was in Multi Sector category. Is now in High Yield Bond. What is it really? A poor performing high yield or a good performing multi sector or neither?
Actually, its not. It's a style box agnostic fund which recently has invested almost universally in the HY space because that is where the manager sees the present opportunity for its investors. This is made very clear in their literature and reports if one cares to look. When conditions change, it will change as well.
Then you and Morningstar can name it again Ted when its composition evolves to mostly convertibles and Treasuries in a different economic environment and Ron will be no better off for either of your efforts at understanding how the fund invests.
Ok ! Mr. its back to bond school for you. Your going to have to learn the difference between AAA, AA, A, BBB, BB, B, CCC, CC, C graded bonds. There will be a test at the end of this Bond 101 course.
This is a great conservative strategic income fund in my opinion with very decent but unspectacular returns and relatively lower volatility. Good managers who understand the risk reward trade offs. As I said, its present composition is HY but that changes as the economic environment does. These changes are the meaning of "strategic" in its name.
I think there's as much difference between short duration junk and regular high yield as there is between short term investment grade and long term investment grade. Don't know if there are enough short duration junk funds for Morningstar to consider them a separate category, but I think the investor has to make the distinction rather than counting on star ratings. OSTIX has been in short duration high yield for quite awhile now, I believe, but as Mark says, it could leave it if it decides that would be wise. IMO, it's a good low risk bond fund period.
Ron...over the past few months, the monthly commentary on this site has noted the change in M* rating due to the (mis)characterization of funds, with OSTIX being a prime example.
It dropped 2 stars, due to the re-characterization of the fund to high yield.
A search using OSTIX on the front page will provide more details.
I think there's as much difference between short duration junk and regular high yield as there is between short term investment grade and long term investment grade. Don't know if there are enough short duration junk funds for Morningstar to consider them a separate category, but I think the investor has to make the distinction rather than counting on star ratings. OSTIX has been in short duration high yield for quite awhile now, I believe, but as Mark says, it could leave it if it decides that would be wise. IMO, it's a good low risk bond fund period.
Comments
Cheers,
Back To School:
I am linking the fund overview here:
http://www.osterweis.com/mutual_funds/strategic_income
Also a link to the fund literature page here:
http://www.osterweis.com/mutual_funds/strategic_income/literature
This is a great conservative strategic income fund in my opinion with very decent but unspectacular returns and relatively lower volatility. Good managers who understand the risk reward trade offs. As I said, its present composition is HY but that changes as the economic environment does. These changes are the meaning of "strategic" in its name.
Regards,
Mark
It dropped 2 stars, due to the re-characterization of the fund to high yield.
A search using OSTIX on the front page will provide more details.