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@Mona: >> comparison between RSIVX with PONDX is useless. They are two different animals. If you want to compare RSIVX with another primarily high yield fund ....
Gosh, you'd better tell M*, which categorizes them identically and also benchmarks them identically --- and not high yield.
This thread was worrisome enough from a contrarian point of view and now today's action. Up to 19% in corp junk and looking to go 25% by the close depending on the rest of the day.
And yet their prospectus investment objectives are very close to identical too. And their performance too, with the newer fund less strong but smoother. Lipper does categorize them differently, at a high level anyway, flexible portfolio vs multisector income. There are many ways to achieve their similar objectives. Obviously.
The best number for RiverPark is 212-484-2100 in NYC. If you are fortunate as I have been, you will be able to discuss RSVIX with Morty Schaja. He is the CEO and Managing Partner.
The performance and statistics team at PIMCO can be reached at 949-720-4706. They are located in Newport Beach California, but assuming you are on EST, don't be overly concerned the time you call. I normally speak with them between 9:00 - 9:30 AM EST (6:00 - 6:30 AM PST) and they are already on their second pot of coffee.
Pimco is well known for buying derivative instruments which would increase volatility.
The category "Multisector Bond" is general. But, I am splitting hairs here. Yes it could be said that these funds are similar. The background heritage and investing style of the fund companies themselves might be the biggest difference here and one that should be noted as I did with the derivatives issue.
Oh, no, I think you have got it, thanks, and Mona provided current detail. I was not making any other argument; they do have different holdings. At the moment. ( I knew their prospectuses, as I help write and edit such as a financial freelancer.) Their similar objective may mean that those current holdings and approaches will modulate down the road, however, with conditions. As they should. Your point is well-taken about company style. I was speaking about them at a high level, and only that, and again emphasize that there are many ways, which they can flexibly choose and combine, to achieve their pretty similar objectives.
Pimco is well known for buying derivative instruments which would increase volatility.
The category "Multisector Bond" is general. But, I am splitting hairs here. Yes it could be said that these funds are similar. The background heritage and investing style of the fund companies themselves might be the biggest difference here and one that should be noted as I did with the derivatives issue.
Hi John,
1. "On first glance these funds look very similar" - Not to me, but I can see why to some.
2. "There are a few details like the allocation percentages that are different. The issue with comparing these funds is that they are like oil on water".
3. Why is comparing these funds "like water on oil"? A. The allocation percentages are very different and always have been. B. "RSVIX is currently holding a lot of corporate instruments (and historically has)" C. "PONDX is spread out over the spectrum (and always has been)" D. "Pimco is well known for buying derivative instruments which would increase volatility (and always has been)"
So based on your description, what does RSIVX and PONDX have in common?
Morningstar incorrectly categorizes both as Mulisector Bond Funds. All one needs to do is read the prospectus of each, as you have done, to conclude "The issue with comparing these funds is that they are like oil on water"
@Mona, thanks for that info. These are not funds that I watch so I am at a disadvantage here. Interesting that they both have a go anywhere kind of mandate but seem satisfied to stay put where they are. The intrincities of bond funds always confuse me. Thanks again for the enlightenment.
@Mona, thanks for that info. These are not funds that I watch so I am at a disadvantage here. Interesting that they both have a go anywhere kind of mandate but seem satisfied to stay put where they are. The intrincities of bond funds always confuse me. Thanks again for the enlightenment.
Hi again,
The mandates of each fund have different perimeters. And, RSIVX and PONDX operate, as you correctly observed, in two different spaces. It is for these reasons the two should not be compared, simply because Morningstar categorize both as Multisector Bonds Funds.
Apples and oranges are both fruit, but they do not taste similar to me.
@davidmoran, i see you're very active on these boards and very well spoken. your prolific inputs however often site incomplete data. i am again siding with @Mona. may be it's a 'girl thing' (insert smiley face) or may be i tend to like more factual information obtained from the source. you see, dan ivascyn is a mortgage guy and always will be - despite his promotion to the cio (just like jeff gundlach of doubleline, by the way). when a mortgage guy launches a multi-strat fixed income fund, you can bet, that it will have around 80% in mortgages in its 'neutral state' with as little as 40 when the opportunities vanish and as much as 100% when it's available (the overall gross exposure would be more than a 100% due to derivatives). when david sherman runs a high yield fund, you can bet the holdings are mostly corporates.
you see, i too am involved with funds offering documents. in my experience, prospectus discloses very little -- just tons of risk disclosures. most US income funds will have their benchmark as barclays agg and their investment objective as current income and capital preservation, while US large cap equities will be benchmarked to spx with the stated investment objective as capital appreciation. doesn't say much, does it? i actually encourage generic and flexible language where possible as not to request a board approval every time the investment environment changes and pm's find a more attractive sub-asset class. what is important to me are the fund's investment guidelines - whether or not they are disclosed in the prospectus. for an investor, the real positioning of the fund comes from understanding the manager and studying the factsheets, financials and reading the commentary or participating in investor calls. (well, Mona went further and actually called the company.)
to make my post more relevant to the OP, i have invested in PDI since it lost its IPO premium and am still holding a somewhat reduced position. PDI is a more leveraged and a bit spicier version of PIMIX. i recently took a little position in PRRIX since this is a bet partially that the longer interest rates will stay grounded for a while and inflation breakevens are underpriced. and of course, i am all over munis of my specific state - via cheap vanguard oef and several leveraged cef's. unlike @Junkster here, i am not a muni seller today as i am at a high tax bracket and (junkster, close your ears/eyes) tend to maintain a somewhat diversified portfolio.
i agree with junkster however that high yield is back from the dead in the last couple of weeks (and actually outperformed equities in the last two days), and am staying in hy bonds and recently re-entered loans. i do own some preferreds - one individual holding and a cef.
(well, Mona went further and actually called the company.)
fundalarm,
I call and interview each and every fund (I stick with OEFs) I own. I have worked very hard for what I have and I am not about to lose everything because I was too lazy to do my due diligence. And the only way I know how to do it, is to look carefully under the hood. I am not a momentum investor like Junkster, albeit I respect his system, and wish that I understood it better. But since I do not, I work with the cards I have been dealt.
I speak with Dan Ivascyn's team, I speak with Mark Kiesel's team, I speak with Andrew Thomas Ball's Team, I speak with Dan Fuss's team, I speak with Morty Schaja's team, I speak with Jeff's Gundlach's team, I speak with Tad Rivelle's team, I constantly speak with Wellington Management, like clockwork the folks at Primecap Management know when I am going to call, and these conversations are not always pleasant; a good example being my weekly call for about the past year to Artisan. "I am tired of you telling me about alpha, I am paying you a premium to show me alpha!".
Historically I have not posted much and I will revert to my reading posts from selected people. Every so often I take a stupid pill and think that I will learn by talking, rather than listening. My bad.
Hi @fundalarm I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.
And yes, high yield has been happier again these past several trading days. I can not confirm; but suspect some of the positive direction is related to more positive action in the energy sector and their junk bonds. I also feel that if crude prices remain below $60/barrel and especially around the $50 area for the next year or so, that there be both high yield defaults in this area; as well as stronger players in this area (fracking) to start to buy the companies that are on the edge, a consolidation.
Hi @fundalarm I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.
And yes, high yield has been happier again these past several trading days. I can not confirm; but suspect some of the positive direction is related to more positive action in the energy sector and their junk bonds. I also feel that if crude prices remain below $60/barrel and especially around the $50 area for the next year or so, that there be both high yield defaults in this area; as well as stronger players in this area (fracking) to start to buy the companies that are on the edge, a consolidation.
Take care of you and yours, Catch
Except for oil and gas issues, things are really looking up for junk rated companies.
Hi @fundalarm I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.
Hi catch,
I am not fundalarm, but please bear with me.
As you know, PIMIX and PONDX are the "same" fund. The only difference is in the "share class" or expense ratio. PIMIX are "institutional" shares and have an expense ratio of 0.45% and PONDX are "D" shares and have an expense ratio of 0.77%. Other than that, no difference.
You are correct that PIMIX (or PONDX) has had a rough start, but rewarding in the past. You are also correct that Dan has reduced his exposure in the mortgage sector. That said, I am confident Dan Ivascyn is as bright and sharp as the past. However, where I have some reservation, is with his promotion with the departure of Bill Gross. With his increased responsibilities, will he be able to perform at the high level that we both are accustomed to? I have no idea.
This is how I am handling PIMIX. It's still positive YTD. If and until it goes negative by 1%, I am staying with it. Yes, Junkster has taught me a few things
Thoughtful post appreciated. (But why do you, who label me marxist, call yourself fundalarm? Some sort of historical appointment?)
>> when a mortgage guy launches a multi-strat fixed income fund, you can bet, that it will have around 80% in mortgages in its 'neutral state' with as little as 40 when the opportunities vanish and as much as 100% when it's available
Well, exactly ... not sure whose point you are making in pointing this out, but that was my thinking from the getgo, and the reason I began at the flexible and nominal high level. Perhaps I should've phrased it more as a question. Go-anywhere bond funds, etc.
>> incomplete data.
I obvs do not intend to cite incomplete data, just wanted to hear and query how multisectors did their thing and whether there was comparability over time and changing circumstance.
>> dan ivascyn is a mortgage guy and always will be
As a longtime owner of his efforts I know this and would then pose the question (again) why is his vehicle mandate language as it is?
(OT: what has happened to PDI, do you suppose? And it is not quite the etf version of PONDX/PIMIX, is it.)
>> i actually encourage generic and flexible language where possible as not to request a board approval every time
Well, sure. In this country especially the point is not to have many review loops with legal. Can't be helped, and they ruin most explanations and not in the good way. As the contract drafter you have to also redirect (polite term; rechannel?) the foolishnesses of the marketing people and the wackiness, or sometimes timidity, or sometimes both, of the various managers.
@Mona: PDI has recently suffered from the non-investment grade spread widening (as did all HY), but also from being hedged duration - as long treasuries ripped. Pure play non-agencies (like DMO) had somewhat better NAV performance.
Do contribute! Such give-take discussions are a breath of fresh air amid a bombardment of financial spam.
@davidmoran: I had a different handle during the fundalarm reign, but it was too short to be transferred here, hence this one - came naturally. At least I don't post under different handles as some here. No, no special nomination or any other insider privilege.
While only one day, this is a rather large percentage difference between two "Multisector Bond Funds" that you feel should be compared to each other.
Since I see by your post that you fully embraced and learned from fundalarm's, would you tell us why RSIVX was flat on the day and PONDX was up 1/3rd of a percent?
@Mona I am fascinated that you call the fund companies on a regular basis. Do you have typical questions? I am curious as to what subjects you cover with them. Do you really berating them for not bettering their benchmarks? Sounds like a good method for stress relief! Do they have issues with answering questions not already in public documents (ex. SAI, Quarterly Reports)?
Hi Maurice,
No, I do not berate the folks at Artisan. But when I am paying good money (ER 1.19%) for a fund such as ARTQX, I do want to know their thoughts as why the fund continues to under-perform the Russell Midcap Value Index and Russell Midcap Index (the fund uses both benchmarks).
When we get beyond talking about the Green Bay Packers, I try to determine a number of things to aid me in making an informed decision as to if I want to fire them or have reasons to remain in the fund. Some include:
1. I have seen Morningstar report changes in volatility measures. I would like to know if they agree and if so, the causes.
2. I would like to know if there has been recent changes in the top 10 holdings, especially because ARTQX has a concentrated portfolio (normally around 55 holdings) and the top 10 usually comprise about 30% of the portfolio.
3. I would like their opinion on the specific sector(s) attributing to the under performance (the individual stocks I can follow).
4. Historically ARTQX turnover ratio has been low for an actively managed fund (mid 20% range). I try to find out if they project this to stay the same, increase or decrease. I try to deduce if they are making changes or sticking with the holdings they believe continue to have attractive valuations.
5. The fund has some exposure to large cap and small cap stocks. I would like to know where the portfolio managers believe the best valuations currently exist.
Other topics come up, both quantitative and qualitative, but the point is I am am trying to find out the current thinking of the portfolio managers. Many times I do not get pinpoint answers, which probably relates to SEC issues. However, I do walk away with more than I brought to the table. And as upset as I sometimes get, Artisan is a "boutique" house, and my experience is that they appreciate and value dialogue with a shareholder. No, I do not bang my hand on the table
All the dated quantitative information is certainly in public documents such as their Statuary Prospectus, Summary Prospectus, Statement of Additional Information, and their Semiannual and Annual Reports. I am searching for recent changes and current thinking.
@Mona: PDI has recently suffered from the non-investment grade spread widening (as did all HY), but also from being hedged duration - as long treasuries ripped.
Hi fundalarm,
And Bill has been selling a few shares. Guess he needs some extra change.
Your frequent conversations with fund managers, while commendable, raises one concern - being related to the following: As I understand it, open-ended mutual funds are required by a 2004 SEC amendment to existing policy to publicly disclose their portfolio holdings quarterly. This rule replaced an older one requiring semi-annual reporting of holdings. Most fund companies argued strenuously against the adoption of more frequent reporting during the period of public debate, arguing among other things that (1) The new policy increased the likelihood of "front-running" of mutual fund sales and purchases and (2) It promoted "load riding" whereby investors could replicate a fund's holdings without having paid for the research costs.
The first link is to a 2001 position paper by the Investment Company Institute stating their reasons for opposing more frequent disclosure. They lost the battle, but I still find their logic interesting and somewhat compelling. http://www.ici.org/pdf/per07-03.pdf
Virtually all mutual fund companies have written policy governing disclosure of portfolio holdings. These appear quite stringent. The following (inked) one from Dreyfus allows a manager (or his designee) to reveal the following to non company affilliated persons ONLY If the information has already been previously disseminated to the publuic:
"...Top ten holdings and the total percentage of the Fund such aggregate holdings represent ... Sector information and the total percentage of the Fund held in each sector ... Any other analytical data that does not identify any specific portfolio holding"
What I'm wondering is what you can learn from speaking to a fund manager that isn't already public knowledge available on the fund's website, in their annual and semi-annual reports, or in their SEC required quarterly disclosures? I like to suppose that if I phoned Dodge and Cox one of their managers would talk with me. (I'd thank them for making me a lot of money over the years.) However, if he/she revealed to me that they were considering adding to their position in Company X sometime in the next few weeks, I'd be a bit alarmed. I'd wonder who else had already been tipped-off about the impending purchase and whether the stock's price had already been driven higher as a result of this advance knowledge.
Just some thoughts on this whole issue of calling up fund managers.
Yep. I've seen he started to reduce his position. His total was about 3 percent of the fund and he is not dummy re execution- his traders follow vwap or other measures NOT to influence pricing. Note that PDI is owned by several funds, so gross' sales are tiny. His children's trusts are also holding the name, so a few months ago he thought he was buying a premium product.
what changed in those couple of months is that dan replaced him at the helm of pimco (and caused his ouster) and bill had to liquidate a lot of readily available stuff to contribute $700mm to his new janus offering.
I wouldn't place a lot of weight on these highly logical actions. if you think non agency trade has ran out and pdi interest rate hedges will hurt performance (if treasuries continue to appreciate) then it is a valid reason to sell (not to buy).
@Mona: PDI has recently suffered from the non-investment grade spread widening (as did all HY), but also from being hedged duration - as long treasuries ripped.
Hi fundalarm,
And Bill has been selling a few shares. Guess he needs some extra change.
Comments
>> comparison between RSIVX with PONDX is useless. They are two different animals. If you want to compare RSIVX with another primarily high yield fund ....
Gosh, you'd better tell M*, which categorizes them identically and also benchmarks them identically --- and not high yield.
"Gosh, you'd better tell M*, which categorizes them identically and also benchmarks them identically --- and not high yield."
It would not be the first time M* has mis-categorized funds. This has been an issue for them.
The best number for RiverPark is 212-484-2100 in NYC. If you are fortunate as I have been, you will be able to discuss RSVIX with Morty Schaja. He is the CEO and Managing Partner.
The performance and statistics team at PIMCO can be reached at 949-720-4706. They are located in Newport Beach California, but assuming you are on EST, don't be overly concerned the time you call. I normally speak with them between 9:00 - 9:30 AM EST (6:00 - 6:30 AM PST) and they are already on their second pot of coffee.
Hope this helps.
There are a few details like the allocation percentages that are different. The issue with comparing these funds is that they are like oil on water. RSIVX is currently holding a lot of corporate instruments. https://fundresearch.fidelity.com/mutual-funds/composition/76882K751?type=o-NavBar
PONDX is spread out over the spectrum. https://fundresearch.fidelity.com/mutual-funds/composition/72201F458?type=o-NavBar
Pimco is well known for buying derivative instruments which would increase volatility.
The category "Multisector Bond" is general. But, I am splitting hairs here. Yes it could be said that these funds are similar. The background heritage and investing style of the fund companies themselves might be the biggest difference here and one that should be noted as I did with the derivatives issue.
Oh, no, I think you have got it, thanks, and Mona provided current detail. I was not making any other argument; they do have different holdings. At the moment. ( I knew their prospectuses, as I help write and edit such as a financial freelancer.) Their similar objective may mean that those current holdings and approaches will modulate down the road, however, with conditions. As they should. Your point is well-taken about company style. I was speaking about them at a high level, and only that, and again emphasize that there are many ways, which they can flexibly choose and combine, to achieve their pretty similar objectives.
Hi John,
1. "On first glance these funds look very similar" - Not to me, but I can see why to some.
2. "There are a few details like the allocation percentages that are different. The issue with comparing these funds is that they are like oil on water".
3. Why is comparing these funds "like water on oil"?
A. The allocation percentages are very different and always have been.
B. "RSVIX is currently holding a lot of corporate instruments (and historically has)"
C. "PONDX is spread out over the spectrum (and always has been)"
D. "Pimco is well known for buying derivative instruments which would increase volatility (and always has been)"
So based on your description, what does RSIVX and PONDX have in common?
Morningstar incorrectly categorizes both as Mulisector Bond Funds. All one needs to do is read the prospectus of each, as you have done, to conclude "The issue with comparing these funds is that they are like oil on water"
Best Regards,
Mona
The mandates of each fund have different perimeters. And, RSIVX and PONDX operate, as you correctly observed, in two different spaces. It is for these reasons the two should not be compared, simply because Morningstar categorize both as Multisector Bonds Funds.
Apples and oranges are both fruit, but they do not taste similar to me.
Best Regards,
Mona
you see, i too am involved with funds offering documents. in my experience, prospectus discloses very little -- just tons of risk disclosures. most US income funds will have their benchmark as barclays agg and their investment objective as current income and capital preservation, while US large cap equities will be benchmarked to spx with the stated investment objective as capital appreciation. doesn't say much, does it? i actually encourage generic and flexible language where possible as not to request a board approval every time the investment environment changes and pm's find a more attractive sub-asset class. what is important to me are the fund's investment guidelines - whether or not they are disclosed in the prospectus. for an investor, the real positioning of the fund comes from understanding the manager and studying the factsheets, financials and reading the commentary or participating in investor calls. (well, Mona went further and actually called the company.)
to make my post more relevant to the OP, i have invested in PDI since it lost its IPO premium and am still holding a somewhat reduced position. PDI is a more leveraged and a bit spicier version of PIMIX. i recently took a little position in PRRIX since this is a bet partially that the longer interest rates will stay grounded for a while and inflation breakevens are underpriced. and of course, i am all over munis of my specific state - via cheap vanguard oef and several leveraged cef's. unlike @Junkster here, i am not a muni seller today as i am at a high tax bracket and (junkster, close your ears/eyes) tend to maintain a somewhat diversified portfolio.
i agree with junkster however that high yield is back from the dead in the last couple of weeks (and actually outperformed equities in the last two days), and am staying in hy bonds and recently re-entered loans. i do own some preferreds - one individual holding and a cef.
so much for favorite bond fund!
best, fa
I call and interview each and every fund (I stick with OEFs) I own. I have worked very hard for what I have and I am not about to lose everything because I was too lazy to do my due diligence. And the only way I know how to do it, is to look carefully under the hood. I am not a momentum investor like Junkster, albeit I respect his system, and wish that I understood it better. But since I do not, I work with the cards I have been dealt.
I speak with Dan Ivascyn's team, I speak with Mark Kiesel's team, I speak with Andrew Thomas Ball's Team, I speak with Dan Fuss's team, I speak with Morty Schaja's team, I speak with Jeff's Gundlach's team, I speak with Tad Rivelle's team, I constantly speak with Wellington Management, like clockwork the folks at Primecap Management know when I am going to call, and these conversations are not always pleasant; a good example being my weekly call for about the past year to Artisan. "I am tired of you telling me about alpha, I am paying you a premium to show me alpha!".
Historically I have not posted much and I will revert to my reading posts from selected people. Every so often I take a stupid pill and think that I will learn by talking, rather than listening. My bad.
Mona
I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.
And yes, high yield has been happier again these past several trading days. I can not confirm; but suspect some of the positive direction is related to more positive action in the energy sector and their junk bonds. I also feel that if crude prices remain below $60/barrel and especially around the $50 area for the next year or so, that there be both high yield defaults in this area; as well as stronger players in this area (fracking) to start to buy the companies that are on the edge, a consolidation.
Take care of you and yours,
Catch
Except for oil and gas issues, things are really looking up for junk rated companies.
http://blogs.barrons.com/incomeinvesting/2015/02/03/moodys-corporate-liquidity-rises-burned-by-energy/
I am not fundalarm, but please bear with me.
As you know, PIMIX and PONDX are the "same" fund. The only difference is in the "share class" or expense ratio. PIMIX are "institutional" shares and have an expense ratio of 0.45% and PONDX are "D" shares and have an expense ratio of 0.77%. Other than that, no difference.
You are correct that PIMIX (or PONDX) has had a rough start, but rewarding in the past. You are also correct that Dan has reduced his exposure in the mortgage sector. That said, I am confident Dan Ivascyn is as bright and sharp as the past. However, where I have some reservation, is with his promotion with the departure of Bill Gross. With his increased responsibilities, will he be able to perform at the high level that we both are accustomed to? I have no idea.
This is how I am handling PIMIX. It's still positive YTD. If and until it goes negative by 1%, I am staying with it. Yes, Junkster has taught me a few things
Mona
Thoughtful post appreciated. (But why do you, who label me marxist, call yourself fundalarm? Some sort of historical appointment?)
>> when a mortgage guy launches a multi-strat fixed income fund, you can bet, that it will have around 80% in mortgages in its 'neutral state' with as little as 40 when the opportunities vanish and as much as 100% when it's available
Well, exactly ... not sure whose point you are making in pointing this out, but that was my thinking from the getgo, and the reason I began at the flexible and nominal high level. Perhaps I should've phrased it more as a question. Go-anywhere bond funds, etc.
>> incomplete data.
I obvs do not intend to cite incomplete data, just wanted to hear and query how multisectors did their thing and whether there was comparability over time and changing circumstance.
>> dan ivascyn is a mortgage guy and always will be
As a longtime owner of his efforts I know this and would then pose the question (again) why is his vehicle mandate language as it is?
(OT: what has happened to PDI, do you suppose? And it is not quite the etf version of PONDX/PIMIX, is it.)
>> i actually encourage generic and flexible language where possible as not to request a board approval every time
Well, sure. In this country especially the point is not to have many review loops with legal. Can't be helped, and they ruin most explanations and not in the good way. As the contract drafter you have to also redirect (polite term; rechannel?) the foolishnesses of the marketing people and the wackiness, or sometimes timidity, or sometimes both, of the various managers.
Thanks.
Do contribute! Such give-take discussions are a breath of fresh air amid a bombardment of financial spam.
@davidmoran: I had a different handle during the fundalarm reign, but it was too short to be transferred here, hence this one - came naturally. At least I don't post under different handles as some here. No, no special nomination or any other insider privilege.
0.00 RSIVX - RiverPark Strategic Income
0.33 PONDX - PIMCO Income
Dr. Dave,
While only one day, this is a rather large percentage difference between two "Multisector Bond Funds" that you feel should be compared to each other.
Since I see by your post that you fully embraced and learned from fundalarm's, would you tell us why RSIVX was flat on the day and PONDX was up 1/3rd of a percent?
Hint: Look under the hood.
Do you always answer a question with a question?
I am still waiting.
No, I do not berate the folks at Artisan. But when I am paying good money (ER 1.19%) for a fund such as ARTQX, I do want to know their thoughts as why the fund continues to under-perform the Russell Midcap Value Index and Russell Midcap Index (the fund uses both benchmarks).
When we get beyond talking about the Green Bay Packers, I try to determine a number of things to aid me in making an informed decision as to if I want to fire them or have reasons to remain in the fund. Some include:
1. I have seen Morningstar report changes in volatility measures. I would like to know if they agree and if so, the causes.
2. I would like to know if there has been recent changes in the top 10 holdings, especially because ARTQX has a concentrated portfolio (normally around 55 holdings) and the top 10 usually comprise about 30% of the portfolio.
3. I would like their opinion on the specific sector(s) attributing to the under performance (the individual stocks I can follow).
4. Historically ARTQX turnover ratio has been low for an actively managed fund (mid 20% range). I try to find out if they project this to stay the same, increase or decrease. I try to deduce if they are making changes or sticking with the holdings they believe continue to have attractive valuations.
5. The fund has some exposure to large cap and small cap stocks. I would like to know where the portfolio managers believe the best valuations currently exist.
Other topics come up, both quantitative and qualitative, but the point is I am am trying to find out the current thinking of the portfolio managers. Many times I do not get pinpoint answers, which probably relates to SEC issues. However, I do walk away with more than I brought to the table. And as upset as I sometimes get, Artisan is a "boutique" house, and my experience is that they appreciate and value dialogue with a shareholder. No, I do not bang my hand on the table
All the dated quantitative information is certainly in public documents such as their Statuary Prospectus, Summary Prospectus, Statement of Additional Information, and their Semiannual and Annual Reports. I am searching for recent changes and current thinking.
Best Regards,
Mona
>> PDI has recently suffered from the non-investment grade spread widening (as did all HY), but also from being hedged duration ...
Any guesses about PDI prospects for this year?
Hi fundalarm,
And Bill has been selling a few shares. Guess he needs some extra change.
http://www.secform4.com/insider-trading/1201891.htm#A
Best Regards,
Mona
Your frequent conversations with fund managers, while commendable, raises one concern - being related to the following: As I understand it, open-ended mutual funds are required by a 2004 SEC amendment to existing policy to publicly disclose their portfolio holdings quarterly. This rule replaced an older one requiring semi-annual reporting of holdings. Most fund companies argued strenuously against the adoption of more frequent reporting during the period of public debate, arguing among other things that (1) The new policy increased the likelihood of "front-running" of mutual fund sales and purchases and (2) It promoted "load riding" whereby investors could replicate a fund's holdings without having paid for the research costs.
The first link is to a 2001 position paper by the Investment Company Institute stating their reasons for opposing more frequent disclosure. They lost the battle, but I still find their logic interesting and somewhat compelling. http://www.ici.org/pdf/per07-03.pdf
The second link is to the actual SEC Policy adapted in 2004. As far as I know, it is still in effect.
http://www.sec.gov/news/press/2004-16.htm
Virtually all mutual fund companies have written policy governing disclosure of portfolio holdings. These appear quite stringent. The following (inked) one from Dreyfus allows a manager (or his designee) to reveal the following to non company affilliated persons ONLY If the information has already been previously disseminated to the publuic:
"...Top ten holdings and the total percentage of the Fund such aggregate holdings represent ... Sector information and the total percentage of the Fund held in each sector ... Any other analytical data that does not identify any specific portfolio holding"
Violations of policy must be reported to the company's Chief Compliance Officer.
https://public.dreyfus.com/policies-information/holdings-disclosure.html
What I'm wondering is what you can learn from speaking to a fund manager that isn't already public knowledge available on the fund's website, in their annual and semi-annual reports, or in their SEC required quarterly disclosures? I like to suppose that if I phoned Dodge and Cox one of their managers would talk with me. (I'd thank them for making me a lot of money over the years.) However, if he/she revealed to me that they were considering adding to their position in Company X sometime in the next few weeks, I'd be a bit alarmed. I'd wonder who else had already been tipped-off about the impending purchase and whether the stock's price had already been driven higher as a result of this advance knowledge.
Just some thoughts on this whole issue of calling up fund managers.
what changed in those couple of months is that dan replaced him at the helm of pimco (and caused his ouster) and bill had to liquidate a lot of readily available stuff to contribute $700mm to his new janus offering.
I wouldn't place a lot of weight on these highly logical actions. if you think non agency trade has ran out and pdi interest rate hedges will hurt performance (if treasuries continue to appreciate) then it is a valid reason to sell (not to buy).
Best, fa.