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Loren Fleckenstein, analyst at DoubleLine Capital said by telephone: “Honestly, I don’t know the difference between their former neutral rating and this new non-ratable designation. Either way, they don’t understand our fund.”
Ha! Sounds like G and Co. have had just about enough of what G. seemed to think is a bunch of incompetents at M*. He referred to them over and over in his webcasts as 'some analysts in Chicago' who didn't know what they were talking about after they first rated the fund.
Oddly, a M* employee (can't remember the name, a very sharp Korean-American woman) did an interview with G. not long after that rating, and managed to tease out the nature of the fund very precisely and intelligently in a two-page interview transcript, showing pretty clearly that the M* report was off base. Then she was gone inside a couple of months after that, probably on to bigger and better things than M* had to offer.
Fascinating. For two years, at least, maybe meaning not much, maybe a lot, it is equaled by DODIX, is outdone by FSICX, and trounced by PONDX and PDI (perhaps not fair comparisons, I guess). So what's the big deal here?
The real issue is we don't seem to have a SINGLE fund family who does NOT want to be rated by M*. I will be mighty pleased to see a comment by fund manager who says "We don't manage our fund so it can be classified / rated by M*". That'll show some balls.
Well, you've got RPHYX, with their lousy 1* rating, yet closed to additional investors, who doesn't really seem to care that M* really has no idea what they are all about. A healthy 20% of our portfolio is with them.
Well, you've got RPHYX, with their lousy 1* rating, yet closed to additional investors, who doesn't really seem to care that M* really has no idea what they are all about. A healthy 20% of our portfolio is with them.
What's with the 1* on that? Odd. Fund would appear to be doing what it set out to do just fine.
What's with the 1* on that? Odd. Fund would appear to be doing what it set out to do just fine.
I'm not familiar with the fund, but I am familiar with the M* star ratings and M* Analyst ratings, which are two entirely different things:
The M* star rating is a mathematical rating only, based on total return versus category, in this case high yield bond fund category. It's not their personal opinion of the fund, which is expressed in an Analyst rating of gold, silver, bronze, neutral or negative, for funds that have an analyst rating. Math only, compared to category M* has assigned it to.
Here's the performance, and why it has a 1*. Take a look at the percentile Rank in Category, which again is math only, based on total return
This fund is not covered by M*, so there is no analyst report nor Analyst rating of gold, silver, bronze, neutral or negative, which would represent their opinion of the fund
Well, you've got RPHYX, with their lousy 1* rating, yet closed to additional investors, who doesn't really seem to care that M* really has no idea what they are all about. A healthy 20% of our portfolio is with them.
What's with the 1* on that? Odd. Fund would appear to be doing what it set out to do just fine.
What rjb said - it's just the math of a fund that doesn't fit neatly into M* categories. They lump all HY together, regardless of duration, whereas they break investment grade down into 3 duration categories.
There was a thread earlier here pointing out that a short term high yield category would make a lot of sense, since funds that invest along those lines behave pretty differently from either investment grade or all-duration high yield. The catch with RPHYX is how extremely short the maturity/duration it is - its numerical ratings might not look terrific even in a short term HY category.
Comments
Oddly, a M* employee (can't remember the name, a very sharp Korean-American woman) did an interview with G. not long after that rating, and managed to tease out the nature of the fund very precisely and intelligently in a two-page interview transcript, showing pretty clearly that the M* report was off base. Then she was gone inside a couple of months after that, probably on to bigger and better things than M* had to offer.
The M* star rating is a mathematical rating only, based on total return versus category, in this case high yield bond fund category. It's not their personal opinion of the fund, which is expressed in an Analyst rating of gold, silver, bronze, neutral or negative, for funds that have an analyst rating. Math only, compared to category M* has assigned it to.
Here's the performance, and why it has a 1*. Take a look at the percentile Rank in Category, which again is math only, based on total return
This fund is not covered by M*, so there is no analyst report nor Analyst rating of gold, silver, bronze, neutral or negative, which would represent their opinion of the fund
There was a thread earlier here pointing out that a short term high yield category would make a lot of sense, since funds that invest along those lines behave pretty differently from either investment grade or all-duration high yield. The catch with RPHYX is how extremely short the maturity/duration it is - its numerical ratings might not look terrific even in a short term HY category.
Regards,
Ted
P.S. Where is my chocolate ?