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Turner Medical Sciences Long Short Fund

beebee
edited April 2014 in Fund Discussions
TMSFX's ER is 1.78 and has a short (inception 2011) long / short history. $53 M AUM.

"The investment seeks capital appreciation. The fund invests primarily (at least 80% of its net assets) in stocks of companies engaged in the health care sector using a long/short growth strategy in seeking to capture alpha, reduce volatility, and preserve capital in declining markets. "

Charted against PRHSX provides an interesting performance comparison over the last 16 months.

How would an investor use TMSFX to hedge PRHSX (or any other Health Care fund) from volatility or downside risk?

image

Comments

  • scott
    HHCCX is the other fund that is l/s healthcare. (And yes, before everyone gets all upset, it does have a high ER and load, but it has done reasonably well...)
  • kevindowkevindow
    edited April 2014
    HHCZX (prospectus & true investor ER 2.67%) is available for a $100 minimum plus a TF at Scottrade in both taxable and tax deferred accounts.

    Looks like TMSFX has a prospectus & true investor ER of 2.20%, not the misleading ER reported by M*. The front page M* ER should actually represent what investors pay, not an ER that nobody pays.

    Kevin
  • STB65
    If you are a short term investor, L/S health funds may add value.
    As boomers become geezers, it's more important to select your manager, or just buy the health fund index. These ERs don't make sense over 5 or 10 years.
    If you think health care funds are currently overpriced, buy RSIVX and wait for your entry point. Health care funds have to gain over the next decade, if any class of funds will. I really think the growth will extend beyond the decade.
    The re-entry for biotech, if you are out, is more problematic, but that is where the most growth will occur, since the individual companies have a pricing advantage for their successful products. Unless there is a major change in health policy, these are funds to buy and revisit yearly. Either average in or buy on a major market dip.
  • finder
    Both TMSFX and HHCCX were going nowhere from January 2011 to mid 2013, so the beautiful figure above does not fully represent them. TMSFX had a manager change a month ago.
  • beebee
    edited April 2014
    finder said:

    Both TMSFX and HHCCX were going nowhere from January 2011 to mid 2013, so the beautiful figure above does not fully represent them. TMSFX had a manager change a month ago.

    The point of the chart is to follow a fund (PRHSX) against an indicator (in this case TMSFX). Short charts can be very telling. They can tell me when to stay fully invested, when to employ hedging, when to scale out, when to take profits, and when to scale in.

    This short YTD chart shows how I recently went from being fully invested mode (green comment box and arrows) to when I began scaling back (in this case it could also be called take profits) (top red comment box). The most recent action (lower red comment box) make me believe there is still some downward movement ahead for Health Care. An investor doesn't have to own TSMFX to utilize it as a helpful indicator.

    A very short YTD chart with my my three investment decisions (comments):
    image

  • finder
    I thought that you recommend to invest in TMSFX. I do understand that one can use it as an indicator but is it any better indicator than cash? In 2011 and 2012 it was flat like cash (plus a bit of volatility). And with the new manager - all bets are off.
  • beebee
    My original question to the board was,

    "How would an investor use TMSFX to hedge PRHSX (or any other Health Care fund) from volatility or downside risk?"

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