Bank Loan Funds - looking like the staid and safe place to be for 2015 in bondland?

Junkster

I've been so caught up in junk bond funds I missed bank loan funds. Some bank loan funds haven't had a down day since 1/27 - either up or unchanged. A nice area for those of us in trading/investing retirement. EVFAX seems to be the stellar one in this sector. 2014 was an uncharacteristically weak year for bank loans and the worst since the 2008 debacle. The surprise move down in Treasuries was the culprit. There had also been massive inflows into these funds expecting higher rates in 2014 and that eventually led to massive outflows as higher rates didn't pan out. Depending on how things shake out with tomorrow's employment report may begin scaling into EVFAX.

http://blogs.barrons.com/incomeinvesting/2015/03/05/bond-funds-that-benefit-from-rising-rates/?mod=BOL_hp_blog_ii

Edit: On further review these funds are massively overbought. I am generally not into technical indicators but after extended runs will look at the 14 day RSI. Anything over 90 is worrisome.

00BY

FFRHX, chart looks nice, up 1.64% over the past four weeks

heezsafe

@Junkster Why are you worrying about bank loans? Don't you have more pressing concerns, like putting on boots and shoveling something white and heavy? Mush!

JohnChisum

Are these funds the same as floating rate funds like DLFRX?

Edit: did some research and found out they're the same.

These funds have been touted as an alternative to money market funds. Im not sure they are.

Old_Skeet

Hi Junkster,

I thought about changing out one of my funds within my income sleeve for a bank loan fund but decided against it as I felt these funds were selling for a good premium. And, with the looks of things they could become even more pricey. So I'll continue to rock along with EVBAX and will hold up on moving into a floating rate type security although they are indeed right on the heals of corporate high yeilds performance wise at the moment. I guess this makes corporate high yields kind of pricey too.

Good value is just hard to find these days.

Old_Skeet

Junkster

The Utilities sure did ring the bell. The low in yields already looked like it had been in for Treasury yields and today the last brick in the wall.

heezsafe said:

@Junkster Why are you worrying about bank loans? Don't you have more pressing concerns, like putting on boots and shoveling something white and heavy? Mush!

More than true! Can't hike (they actually closed the nearby National Park) so have been shoveling snow for all the 80+ year old widows in my neighborhood the past two days. Great exercise!!

catch22

@Junkster

Yes, as to the utilities, too. The broad index is -2% at 11am EST. 30 year Treasury about -3%.

Ya think we are only seeing some head fakes from the big money?

Lastly, knowing you watch this stuff, too............energy company misses 1st bond payment on 7 month old issue.

Regards,
Catch

Junkster

catch22 said:

@Junkster

Yes, as to the utilities, too. The broad index is -2% at 11am EST. 30 year Treasury about -3%.

Ya think we are only seeing some head fakes from the big money?

Regards,
Catch

Maybe in equities but it looks ominous for bonds. Went to 33% cash yesterday from 21% and wish it had been more. Unless there is some big turnaround later today may go to 60% cash. I worry all the time even in the best of times but more so than normal this year. As I mentioned to Charles it's the length of the bull and how easy it has been combined with the complacency.