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Liquid Alts Funds Pass First Real Test With Flying Colors
First there's a post saying "‘Alternative’ Mutual Funds Providing Limited Protection" and a few posts late I see "Liquid Alts Funds Pass First Real Test With Flying Colors".
Sounds to me like the jury is still out on these things.
I suspect the only real test they're likely to pass - with flying colors or otherwise - is to generate fees to the fund issuers and brokers that sell them.
Lumping the alts together like these articles do is not the best journalism either. In any case alt funds are good as a diversifier for a portfolio at around 6-12%.
I would not expect a long short fund to outperform this past week but multi asset income and some other have done relatively very well.
First there's a post saying "‘Alternative’ Mutual Funds Providing Limited Protection" and a few posts late I see "Liquid Alts Funds Pass First Real Test With Flying Colors".
Sounds to me like the jury is still out on these things.
I suspect the only real test they're likely to pass - with flying colors or otherwise - is to generate fees to the fund issuers and brokers that sell them.
They got us to read both articles. Whatever they are doing is working for them
I still have to guage these type of funds against a longer time frame than a week or two.
Does one keep a portion of a portfolio in these as protection against downturns? If the equity market is down for more than one year, would there be a great benefit of "total return" using a alt. fund? The "best" alt. fund return for 3 years = 9.9% and for 5 years = 8.3%. The best of these numbers is just that; and what about if one chooses the "bad/wrong" alt. fund and those folks don't really know what they're doing and may present one with a negative return. The alt. funds on this M* list still can not match longer term returns in the 3 and 5 year columns for many equity and many bond funds; and I feel a review in 5 years from today will not be different.
Hell, if I was this smart; I would avoid the alt. funds and would know of soon to arrive downward moves in equity and have sold away those positions to move monies elsewhere.
I'll remain my own smart arse and rely on my own brain cells for today. I'll watch to find whether the alt. funds can capture 3, 5 year or longer positive returns above and beyond a simple mix of 50% each of VTI and BND (or your choice of similar). I wish these "alt." funds well; be I am not optimistic about the long term performance. Even the bear market funds look good right now, eh? Check their 3 and 5 years returns.
I don't have the data but would like to see a comparison between these alt funds and a quality (AA or better short term bond fund. That seems like a better hedge and much cheaper
@jerry This is the short term bond list from the above M* link. You may sort them with clicking on the column headers for returns. You may also click upon the tickers to view within M*. Or you could Google AA short term bond funds that may provide a list of choices. Like most funds, these will come in a variety of flavors based upon what the fund is attempting to provide.
As I try to avoid thinking about my 2:30 class, here are the one month returns for liquid alts and the alts to liquid alts.
Ultra-short term bond funds (0.08%) Best: Oppenheimer Ultra-Short (OSDIX), up 0.15% Worst: PIMCO Short Term (PSHDX) (0.41%)
Short-term bond funds (0.16%) Best: US Global Investors Ultra-Short Term Gov't Bond (UGSDX), up 0.54% Worst: Kinetics Alternative Income (KWINX) (4.42%)
Managed futures (0.50%) Best: LoCorr Long/Short Commodity Strategy (LCSAX), up 6.57% Worst: Catalyst Time Value Trading (TVTAX) (14.77%)
Market neutral funds (0.90%) Best: Hussman Strategic Growth (HSGFX), up 8.0% Worst: PSI All Asset (FXMAX) (11.67%)
Retirement Income (3.15%) Best: Wells Fargo DJ Target Today (STWRX) (0.94%) Worst: Deutsche LifeCompass Retirement (SUCAX) (5.05%)
Conservative allocation (3.57%) Best: a handful of weird special use funds Worst: Federated Managed Volatility (FVOAX) (8.30%)
Long/short equity (4.82%) Best: Otter Creek L/S (OTCRX), up 2.4% with BPLEX close behind Worst: Giralda (GDAMX) (12.96%)
COREX opened in 2014, has $260,000 in assets and 84% in cash. Something tells me this fund is being run in someone's backyard and is hardly a "Core investment" fund.
COREX opened in 2014, has $260,000 in assets and 84% in cash. Something tells me this fund is being run in someone's backyard and is hardly a "Core investment" fund.
Just think VintageFreak, we could each open and manage our own mutual fund and legally deduct all the management expenses. (like trips to Vegas investment shows)
@FundStudent@VintageFreak Just think VintageFreak, we could each open and manage our own mutual fund and legally deduct all the management expenses. (like trips to Vegas investment shows)
What's to prevent any of us to say we are managing a "fund of funds" with our own account?
Comments
"The long-term bond fund category declined by 14 basis points on Monday, while the Barclays U.S. Aggregate Bond Index declined by 3.03%."
Uh, I think not on the "declined by 3.03%, for apparently AGG".
Well, just an observation; as I am still seeking perfection, too.
Sounds to me like the jury is still out on these things.
I suspect the only real test they're likely to pass - with flying colors or otherwise - is to generate fees to the fund issuers and brokers that sell them.
I would not expect a long short fund to outperform this past week but multi asset income and some other have done relatively very well.
Yes.
I still have to guage these type of funds against a longer time frame than a week or two.
Does one keep a portion of a portfolio in these as protection against downturns? If the equity market is down for more than one year, would there be a great benefit of "total return" using a alt. fund?
The "best" alt. fund return for 3 years = 9.9% and for 5 years = 8.3%. The best of these numbers is just that; and what about if one chooses the "bad/wrong" alt. fund and those folks don't really know what they're doing and may present one with a negative return.
The alt. funds on this M* list still can not match longer term returns in the 3 and 5 year columns for many equity and many bond funds; and I feel a review in 5 years from today will not be different.
Hell, if I was this smart; I would avoid the alt. funds and would know of soon to arrive downward moves in equity and have sold away those positions to move monies elsewhere.
I'll remain my own smart arse and rely on my own brain cells for today. I'll watch to find whether the alt. funds can capture 3, 5 year or longer positive returns above and beyond a simple mix of 50% each of VTI and BND (or your choice of similar).
I wish these "alt." funds well; be I am not optimistic about the long term performance.
Even the bear market funds look good right now, eh? Check their 3 and 5 years returns.
M* category returns through Aug. 25
Regards,
Catch
This is the short term bond list from the above M* link. You may sort them with clicking on the column headers for returns. You may also click upon the tickers to view within M*.
Or you could Google AA short term bond funds that may provide a list of choices.
Like most funds, these will come in a variety of flavors based upon what the fund is attempting to provide.
Ultra-short term bond funds (0.08%)
Best: Oppenheimer Ultra-Short (OSDIX), up 0.15%
Worst: PIMCO Short Term (PSHDX) (0.41%)
Short-term bond funds (0.16%)
Best: US Global Investors Ultra-Short Term Gov't Bond (UGSDX), up 0.54%
Worst: Kinetics Alternative Income (KWINX) (4.42%)
Managed futures (0.50%)
Best: LoCorr Long/Short Commodity Strategy (LCSAX), up 6.57%
Worst: Catalyst Time Value Trading (TVTAX) (14.77%)
Market neutral funds (0.90%)
Best: Hussman Strategic Growth (HSGFX), up 8.0%
Worst: PSI All Asset (FXMAX) (11.67%)
Retirement Income (3.15%)
Best: Wells Fargo DJ Target Today (STWRX) (0.94%)
Worst: Deutsche LifeCompass Retirement (SUCAX) (5.05%)
Conservative allocation (3.57%)
Best: a handful of weird special use funds
Worst: Federated Managed Volatility (FVOAX) (8.30%)
Long/short equity (4.82%)
Best: Otter Creek L/S (OTCRX), up 2.4% with BPLEX close behind
Worst: Giralda (GDAMX) (12.96%)
Moderate allocation (6.12%)
Best: Avondale Core (COREX) (1.10%)
Worst: HCM Tactical Growth (HCMGX) (14.67%)
David
http://www.avondalecore.com/
What's to prevent any of us to say we are managing a "fund of funds" with our own account?