Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
As most of us know, the bond market was pretty volatile this week and took some hits overall. Did you notice any trends with your funds, i.e., which funds held up well and which didn't?
The two core bond funds I own, ACCNX and DLFNX both started to drop about the third week of April. May was a bad month to boot. As of this past week, both have continued their downside.
ASDVX, a short duration unconstrained fund on the other hand has gone up slightly in the same time period. It has been very stable.
I own DODIX, which didn't hold up very well partially due to its higher quality holdings. ZEOIX held up pretty well, however. I know it's only a week or month, but sometimes it can be an educational experience during certain situations.
Gundlach was predicting that in 2015 the 10 year could potentially take out its modern day era low of 1.38%. It got down to around 1.64% and then the big bad bear began as we are now at 2.40%. This week was the largest weekly rise in yields since June 2013. One floating rate fund was up this week but it's not available in all states. It kills me to not be able to buy it. In deference to a poster here who's playing it shall remain unnamed.
Gundlach was predicting that in 2015 the 10 year could potentially take out its modern day era low of 1.38%. It got down to around 1.64% and then the big bad bear began as we are now at 2.40%. This week was the largest weekly rise in yields since June 2013. One floating rate fund was up this week but it's not available in all states. It kills me to not be able to buy it. In deference to a poster here who's playing it shall remain unnamed.
FWIW, I own GIFAX (load waived) and it was even or slightly up over the past week. I know it's up overall during the past month.
"Earlier this week, the ECB chief stoked a rout in bonds after he told investors Wednesday to “get used to periods of higher volatility,” confirming one of bond traders’ biggest fears: the extreme price swings in global bond markets could get more common and the impact of reversals more severe."
I can't find a scorecard that will give me just a week's worth. One month results: PRSNX -0.8% DLFNX -0.81% PREMX -1.95% .......Can't say I'm terribly surprised. They keep doing what they're supposed to do for me. The share price has been sinking. But I'm not selling. All divs. reinvested. Both equities and bonds are currently in a funk. The Markets always overreact, both to the upside and downside. Rates? The inevitable will happen, Yellen style, and the Markets will go into a tizzy.
My main bond fund, SUBFX, is down about 0.5%. I'm very disappointed, because I had thought this fund (based on management letters) was short treasuries and positioned to rise in this scenario.
Maybe they closed that bet at precisely the wrong time. Or their latest management letter said they were loading up on energy-related debt, maybe they're a little early to that party.
I seem to have a knack for buying funds that are profiled here on MFO after a fabulous 3 or 4 year run, just to time to watch them mean revert. I'm sticking with it for now, but it's going to be a rule for me going forward: no more bond funds that try to bet where interest rates are going.
My income sleeve was down 0.77% and I feel performed reasonably well this past week in comparison to its index proxy (AGG) which was down 1.29%. The sleeve consisting of five funds (LALDX, LBNDX, NEFZX, THIFX & TSIAX) has a duration of 3.36 while it's index proxy has a duration of 5.29.
@MFO Members: At the present time I don't own any bond funds, but PFF my Preferred Stock Fund, which is also somewhat interest rate sensitive, was down -(0.25)% Regards, Ted
@Ted, Preferred funds performed well this past week. I may add either a preferred fund or bank loan fund to my portfolio. My asset compass indcated that ultra short, bank loan and short term bond funds were the three best performers for the past 30 days.
This has been a rough week on bond funds around the globe this week. Majority of them has lost 1% or more. Think they will rebound in next few weeks.
Few fared better (mostly with short duration): River Park short term high yield, 0.1% loss T. Rowe Price High Yield bond, 0.5% loss Osterweis Strategic Income, 0% loss Matthew Asia Strategic Income, 0.5 loss Metropolitan West Unconstrained, 0.4% loss Metropolitan West Ultra short bond, 0% loss Vanguard Short Term Investment grade bond, 0.4% loss Vanguard short Term bond index, 0.4 loss
@ Dex posted "Earlier this week, the ECB chief stoked a rout in bonds after he told investors Wednesday to “get used to periods of higher volatility,” Adding to that perception:Market Perspectives from Acropolis Posted on June 5, 2015 by David Ott "Naturally, I headed over to our bond guys, Ryan and Cliff to see what they thought. Ryan flatly said, ‘Dave, we’re just watching volatility.’ He is absolutely right.
The chart above shows the yields on a year-to-date basis and from that perspective, yields are high. If we, as Sherlock Holmes says, widen our gaze, to one year, we can see that, in this context, yields are off of their lows but still not particularly high..... We can see that there are wide differences between the highs and the lows, which gets back to Ryan’s point – bond yields have been volatile, but, really, there’s not much to see here.
...Of course, we’ll have to see where things go from here, but it’s far, far too soon to say that these are the higher interest rates we’ve been waiting for over the past six or eight years." http://acrinv.com/interest-rates-rising/
It looked like credit-sensitive stuff held up o.k. last week, as long as duration wasn't too high, but interest-sensitive asset classes.... not so much. EM bonds also ended the week sadly, with some funds doing poorly and some funds hanging tough. Apply these factors into fund analysis of last week's performance and you pretty much have it done.
I'm expecting more bumps for EM bonds for the remainder of June. Ukraine and Greece will be obvious "effectors," but I'm wondering when Venezuela (and possibly even China, as an outlier) might come into play. Jeff Desjardins of Visual Capitalist blogged some info-bits to go with his eye candy about the deteriorating condition of the Chavez bolivar last week: http://www.visualcapitalist.com/the-demise-of-the-venezuelan-bolivar-continues-chart/
Comments
ASDVX, a short duration unconstrained fund on the other hand has gone up slightly in the same time period. It has been very stable.
PRSNX -0.8%
DLFNX -0.81%
PREMX -1.95%
.......Can't say I'm terribly surprised. They keep doing what they're supposed to do for me. The share price has been sinking. But I'm not selling. All divs. reinvested. Both equities and bonds are currently in a funk. The Markets always overreact, both to the upside and downside. Rates? The inevitable will happen, Yellen style, and the Markets will go into a tizzy.
Maybe they closed that bet at precisely the wrong time. Or their latest management letter said they were loading up on energy-related debt, maybe they're a little early to that party.
I seem to have a knack for buying funds that are profiled here on MFO after a fabulous 3 or 4 year run, just to time to watch them mean revert. I'm sticking with it for now, but it's going to be a rule for me going forward: no more bond funds that try to bet where interest rates are going.
Looking at mine again, ACCNX dropped. 1.14% for the week. DLFNX was down 1.09%. ASDVX dropped just 0.20%.
Edited to add link. http://performance.morningstar.com/fund/performance-return.action?t=DLFNX
rsivx = down .3
tginx = down .876
mwcrx = down .167
Have a great weekend, Derf
Regards,
Ted
Regards,
Ted
Few fared better (mostly with short duration):
River Park short term high yield, 0.1% loss
T. Rowe Price High Yield bond, 0.5% loss
Osterweis Strategic Income, 0% loss
Matthew Asia Strategic Income, 0.5 loss
Metropolitan West Unconstrained, 0.4% loss
Metropolitan West Ultra short bond, 0% loss
Vanguard Short Term Investment grade bond, 0.4% loss
Vanguard short Term bond index, 0.4 loss
Adding to that perception:Market Perspectives from Acropolis Posted on June 5, 2015 by David Ott
"Naturally, I headed over to our bond guys, Ryan and Cliff to see what they thought. Ryan flatly said, ‘Dave, we’re just watching volatility.’ He is absolutely right.
The chart above shows the yields on a year-to-date basis and from that perspective, yields are high. If we, as Sherlock Holmes says, widen our gaze, to one year, we can see that, in this context, yields are off of their lows but still not particularly high.....
We can see that there are wide differences between the highs and the lows, which gets back to Ryan’s point – bond yields have been volatile, but, really, there’s not much to see here.
...Of course, we’ll have to see where things go from here, but it’s far, far too soon to say that these are the higher interest rates we’ve been waiting for over the past six or eight years."
http://acrinv.com/interest-rates-rising/
I'm expecting more bumps for EM bonds for the remainder of June. Ukraine and Greece will be obvious "effectors," but I'm wondering when Venezuela (and possibly even China, as an outlier) might come into play. Jeff Desjardins of Visual Capitalist blogged some info-bits to go with his eye candy about the deteriorating condition of the
Chavezbolivar last week:http://www.visualcapitalist.com/the-demise-of-the-venezuelan-bolivar-continues-chart/