What's Your Thoughts on MFLDX?

Old_Skeet

Hello,

I am a holder of MFLDX and I have been pleased with its performance up until the last twelve months where it has now returned less than 1% positive over this period. I am wondering ... Has the fund become too large for its manager to make good macro moves? Or, has he just made some bad macro moves? I have been thinking of letting it go ... but, wanted to poll what the thoughts of others might be. I let IVY Asset Strategy go several years back because I felt it had become too large to effectively position. So what be your thoughts?

Old_Skeet

Old_Joe

I asked Scott the same question a few weeks ago, and he said that he was holding on, at least for now.

Old_Skeet

Hi Old_Joe,
Does that mean you are going to hold on too?

I've got some good profit thus far in MFLDX and I was thinking of taking my profit to my pocket and then putting the principal to work in another position ... possible FCHSX.

Old_Skeet

scott

I actually added moderately over the last week or so. I haven't been that pleased recently, but continue to like management a great deal. The management letters have always been insightful and enjoyable discussions of the various themes the fund has focused on and reasoning behind choices.

I own the original shares (MFLDX) and am not selling.

Old_Skeet

Hi Scott,
Thanks for your comment ... I'll score that a hold!
Old_Skeet

Chinfist

I sold it 3 months ago. I was concerned about asset bloat affecting its performance. Asset bloat or bad macro moves, either way it was performing poorly and I lost confidence in the fund. It was a tough decision, as I have had it for several years, but I began to see little reason in keeping it and I think I made the right decision.

Junkster

What that's old saying about different strokes for different folks?

Edit: Thought I better delete the rest of my post as no need to ruffle feathers. We all have different strategies, risk tolerances, and goals. What feels comfortable for one investor may not feel the same for another.

ducrow

I Sold My Position In MFLDX A Few Months Ago, I Think Asset Bloat Killed The Fund

JohnChisum

"We all have different strategies, risk tolerances, and goals. What feels comfortable for one investor may not feel the same for another."

Rightly so. Well said Junkster.

Old_Joe

Skeet- sorry for the delay- yep, I'm staying for a while, just to see how this works out. It may provide an offset to other portfolio stuff when that goes down. It's not that big a position, so no big deal.

Scott- what significant difference is there between the "original" shares and the "new" shares? (Ours are "MFLDX", which is closed to new investors.) Thanks- OJ

scott

The original (before the fund was bought) shares were MFLDX, which were closed once the fund was bought by Mainstay and remained at the original expense ratio.

Old_Skeet

As of Sunday AM 7:45 EDT, as I write, here is how I have scored the comments.

Undecided 1 (me) ... Hold (2) Old_Joe & Scott ... Sell (2) Chinfist & Decrow ... No Opinion (1) Junkster. Although, I scored Junkster's comment as no opinion I believe he is of the camp to do what one thinks is best within their own portfolio regardless of what others might be thinking. I respect that. However, I wanted to know what others were thinking that own, or recently owned, the fund. Even without knowing what others were thinking I am inclined to let it go since Mainstay bought it, it seems that it has become too large for its manager to effective manage it in a more rapid ever changing macro environment. It may turn out to be a good fund and I sincerely hope so for those that continue to hold it. I plan to move own and will redeploy my capital somewhere else, possibly FCHSX. I purchased the fund for what I felt was its ability to navigate an ever changing macro environment; however, over the past year it seems to be faltering in its mission.

For me, MFLDX is one of five funds held in the growth area specialty sleeve of my portfolio. So with this, it is not an extremely large position within the portfolio itself but it does make up about 25% of its sleeve. I will be leaving with some good jingle (profit) in my pocket.

Thanks for all that made comments. It is much appreciated.

Old_Skeet

Current Revised Poll Count 7/21 7:35 Am EDT... Undecided (1) Hank ... Hold (3) Old_Joe, Scott & BobC... Sell (5) Chinfist, Decrow, Old_Skeet, Vintage Freak & Ted ... No Opinion (2) Junkster & Timgr

Old_Joe

Scott- that's right, I had forgotton about the new er. Thanks- OJ

Old_Joe

Skeet- It's ironic, but with you leaving the fund should slim down to a manageable size for the rest of us. Thanks!

scott

Given the fund's flexibility - global l/s across multiple asset classes - not concerned about bloat (and M* appears to be unconcerned, as well.) The fund makes macro bets. It has entered a rough patch lately (M*: "MainStay Marketfield's recent struggles appear unrelated to asset bloat, as major macroeconomic bets have reversed course.") If you don't want to wait, that's fine.

Ted

@scott: Never has, and never will be my cup of tea especially in a bull market.
Regards,
Ted

Old_Skeet

Hi Scott,

One of the things that I have noticed about the fund since the first of the year is that it seems to be positioning into more value oriented stocks as its p/e ratio has dropped considerably but even moving from a growth orientation to a value orientation its performance still seems to be lagging. I like the manager, but I feel Mainstay has done both their investors and the manager a disservice by letting the fund become too big to manage macro themes in timely manners. Regardless of what is said by some it is no longer the nimble fund that it was before Mainstay purchased it.

Old_Skeet

VintageFreak

I sold MFLDX as soon as THEY sold out. Never looked back, never will.

timgr

Hmmm. Available in my retirement account. $5M minimum investment. Closed to new investors.

Sorry if I pry, but are you guys such high flyers that you trade in and out of a $5M minimum fund? Or maybe the minimum has not always been that high?

There are several classes of this fund - including load classes and an investor class MFNDX at a $2500 minimum, apparently open. Are you invested in one of these lesser classes, and using MFLDX as a proxy for what you own?

JMO - I'd expect an investor with above $5M in MFLDX would be in the super-$25M investable assets range, and I would expect them to employ professional money management services. Maybe not ...

scott

timgr said:

Hmmm. Available in my retirement account. $5M minimum investment. Closed to new investors.

Sorry if I pry, but are you guys such high flyers that you trade in and out of a $5M minimum fund? Or maybe the minimum has not always been that high?

Minimum definitely wasn't $5M.

Old_Joe

C'mon, Scott- you wouldn't have a big problem with that!

hank

Don't like any of these types of funds. Never will. They'll experience a hot streak due to a peculiar allocation mix ... and than the $$ pours in for a while. Then they hit a cold streak ... and $$ pours out. This money moving in and out only magnifies the recent trend, be it positive or negative. The fees are high. You're essentially paying a manager to second-guess what Mr. Market will do next and to make the appropriate timing and allocation moves.

I'm not against such guessing, but think most of us can do it as well ourselves - and save the added fees in the process. Actually, unless you have mountains of $$ to move around, you can probably do it better than they can. Ho-hum ... it's a philosophical argument more than anything else. So, as Junkster says, it's a personal decision and my musings here won't change any opinions.

Skeet ..... only chimed in here after I saw you were keeping score. I could count as "opposed" - but could probably also go down as "undecided" - since I dislike all these types of funds equally.

Regards

Old_Joe

"most of us can do it as well ourselves"

Dunno- sometimes two heads are thicker than one...

BobC

If you believe, as MFLDX manager Michael Arronstein does, that the Fed has screwed up again and that we are overdue for a correction, or even if you do not agree, the fund is designed to be a contrary holding. There are times it will underperform (like the last 12 months). Arronstein is net short on bonds, short emerging markets, consumer staples, utilities, and the euro. A very high "cash" position, too. I am not one who expects all of my holdings to perform in a similar manner. MFLDX has been a terrific long-term hold, and I would not be too hasty in bailing just because it is underperforming now. The manager has made some pretty incredible calls over the years, and the fund uses a macro-economic overlay in helping to make decisions. While I am not a fan of the big inflow of dollars to the fund, I am willing to give Mr. Arronstein considerable time. If he is right, the fund will look darned good in a correction.

Old_Skeet

Thanks BobC for your comment I will add you as a hold in the poll. Always enjoy reading your comments. Last year I owned All Asset which was a topic on the board. At the time it was faltering and I gave it a full year to get its act together ... and, it did. Currently, ytd, it is the third best performing member of its six member sleeve. I am glad I continued to hold. As you say Mr. Arronstein is no doubt a very skilled manager but just how much money can one manager handle? Seems to me, Mainstay opened the gates and continued to build assets which results in more fees for themselves and makes it more difficult for the manager to effectively position.

I remember when Duke Energy merged with Progress Energy in North Carolina things seemed to be in flux when Mr. Johnson the then to become the CEO was fired within hours after the merge. Team Marketfield went short DUK and this little move had a good impact on the funds overall performance because of its much smaller asset base. Today, this would amount to no more than a drop in a big bucket. With its size today it has to look for much bigger macro opportunity.

Bob, I really value you comments that you make on the board ... but, it gets down to each of us have to do what we feel is best. For me MFLDX is a small holding overall within my portfolio, but it does equal about 25% of its five member specialty sleeve. And, it is currently the faltering fund member both within its sleeve and within the portfolio. I have some short term bond funds that are currently outperforming it. I just feel it is taking the manager too long to position the fund based upon ever changing macro themes ... and, that spells asset bloat as it is no longer the nimble fund that it was when I first purchased it. If I felt Mainstay would put a hard close on the fund ... I'd stay. I don't see this happening.

For me, it is now time to move on to something else. For those that wish to continue to hold it ... I wish all well.

Old_Skeet

ron

I always thought the fund was too costly and I would never want to hold enough to make a difference. Therefor, I avoid all these alternative type funds.

scott

Old_Skeet said:

For me, it is now time to move on to something else. For those that wish to continue to hold it ... I wish all well.

Old_Skeet

I'm probably one of the biggest supporters on the board of the idea that people should do whatever they believe is best for them. However, just a couple of "only sayin'" responses:

"Last year I owned All Asset which was a topic on the board. At the time it was faltering and I gave it a full year to get its act together ... and, it did. Currently, ytd, it is the third best performing member of its six member sleeve. I am glad I continued to hold. As you say Mr. Arronstein is no doubt a very skilled manager but just how much money can one manager handle?"

How much does Pimco All Asset have under management? $34.6B. I'm seeing Marketfield at just under $20B.

Both are flexible funds, although All Asset is limited to the universe of Pimco funds. Marketfield can basically go l/s multiple asset classes globally. Marketfield - like Ivy Asset (and Pimco All Asset funds to some degree) have been the focus of discussion of asset bloat previously and, while I'm not saying closing those funds would not be positive, I do think the flexibility of said funds offers a large enough scope/universe that larger AUM would not be the same issue as, say, something more specific (a us small cap value fund, use whatever example you like - Fairholme, even, which did close for a short while.)


---

"I just feel it is taking the manager too long to position the fund based upon ever changing macro themes"

Or is the manager making a macro bet that is taking a little longer to play out? I have not always agreed with Marketfield management (the bet against emerging markets, for example), but the fund has an excellent long-term track record and there is something to owning a fund that goes against your views to some degree.

We'll see (and again, people should do what's best for them) but I agree with BobC's comments, which are detailed and useful as usual.

Old_Skeet

Thanks again Scott for expressing you thoughts,

You make some good points ... However, for me at this time I'll book my profit and move on. I was close to letting All Asset go and kept it under review for a good time. However, the difference between All Asset & Marketfield is that All Asset makes a quarterly distribution while Marketfield does not. So, I was in effect getting paid while I awaited for the worm to turn, so to speak. Still think highly of Marketfield's manager ... but, feel Mainstay has done both the fund's manager and it's investors a disservice by letter the fund grow too fast with assets under management. I'll be looking for something more nimble to replace it ... possibly FCHSX.

Old_Skeet

Junkster

Maybe I can say this better than what I posted and deleted over the weekend. If you held this fund since inception you are ahead of the S&P. But besides being -4.54% YTD it has also underperformed the S&P by 8.12% and 6.65% per annum over the past three and five years respectively. Yes, I know its benchmark is not the S&P and I realize we have been in a long term bull since March of 09. But retirement and old age comes quicker than you might think and looking back in my younger years I would have hated to have been stuck in such an underperformer to the overall market over the past many years. Not my idea of building long term wealth. Then again, I admit to be biased against all these alternative/bear, and long/short funds that have sprung up out of nowhere since 2000.

Kaspa

Sold MFLDX couple of months back. It was a small test position any way.

VintageFreak

BobC said:

If you believe, as MFLDX manager Michael Arronstein does, that the Fed has screwed up again and that we are overdue for a correction, or even if you do not agree, the fund is designed to be a contrary holding. There are times it will underperform (like the last 12 months). Arronstein is net short on bonds, short emerging markets, consumer staples, utilities, and the euro. A very high "cash" position, too. I am not one who expects all of my holdings to perform in a similar manner. MFLDX has been a terrific long-term hold, and I would not be too hasty in bailing just because it is underperforming now. The manager has made some pretty incredible calls over the years, and the fund uses a macro-economic overlay in helping to make decisions. While I am not a fan of the big inflow of dollars to the fund, I am willing to give Mr. Arronstein considerable time. If he is right, the fund will look darned good in a correction.

Hmmm... We don't seem to want to give Hussman considerable time. Or how much time is considerable? Looks to me MFLDX is where HSGFX was at one time, and we all know how that has turned out.