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What I don't understand is why there is something important about looking back at the ten year returns of mutual funds in the same general group. As if it offers some kind of prediction of future returns. I compared the results of glrbx, fpacx, oakbx and berix going back to 1997. These funds are generally regarded as being good funds, not necessarily the best. All of the funds mentioned soundly beat vbinx. So we have a general idea that vbinx did very well compared to it's peers in the last 10 years. In the last 20, vbinx didn't do nearly as well as the above mentioned funds. How can we use this information regarding the future?
Do you believe GLRBX, FPACX, OAKBX and BERIX will still be the best performing funds 20 years from now? If the answer is no, then can you give me the names of the 4 funds that will outperform so I can buy them today? VBINX outperforms 90% of everything else so do you want to risk your capital attempting to pick the best youngest managers you have never heard of today from 1000 balanced funds? How many start up balanced funds have come into existence since 1997? Double that? So you would have had to pick the best 4 out of 2000 in 1997 in order to get the returns you speak of.
The main takeaway point in my view is this: "My thesis is this: Can you say you can pick the top 3.0% to 7.4% of all balanced funds over the next 10 years that will outperform VBINX"? Sure there will be a few out performers, but knowing which ones they are in advance, well that's the hard part. Going with something like VBINV or VWINX (my personal favorite, though actively managed) is a MUCH Better bet. Even those with long records of success can stumble badly...as I've learned over time that out performance by straying from benchmarks inevitably carries risk, which can bite one in the a$$ in time.
Ted, dead horse. yes. ha ha. sorry about that. and I said I wouldn't beat any dead horses anymore once I retired. people gotta learn at their own pace. saying on wall street: when I first met my broker I had the money and he had the experience. when I left my broker he had the money and I had the experience.
Is the question seriously being heatedly asked if PPGFR (past performance guarantees etc.)? We know the answer to that: No.
Is it likely that outperforming balanced funds with long records and the same management will continue to outperform? We know the answer to that too --- sure it is likely in some sense, ... for the most part, ... within limits, ... given luck, ... and a whole host of other variables. This is the essence of mutual fund investing.
Will they do it every year, or every n years? No. Over the long haul, will GLRBX outperform, given the same decisionmakers? Likely.
How likely is likely? Who knows? It is unknowable. PPDNGFR.
If you're uncomfortable or flummoxed or upset with all this mishmash of variables, hopes, predictions, anxieties, but still determined to make some conclusive statements or other, forget it --- and please, please, please do go w indexing, and stop publicly fretting the odds. Horse is buried, dug up, eaten, then reburied.
Lipper puts VBINX in the Growth Allocation category. There are 113 such funds in its database ending January 2016, at least 10 years old, oldest share class only, open and closed.
VBINX stacks up pretty well. Here is list from top, sorted by 10 year annualized total return (APR), which includes expenses, reinvested dividends, and any max front load. (As always, no accounting for category drift or survivorship.)
It beat out Dodge & Cox Balanced DODBX, which has delivered 5% APR, placing it 41 out of 113.
Since 11/13, DSENX (inception date) and PONDX 50/50, much less 60/40, appear to significantly outperform most if not all of these --- except for PRWCX (which of course is on this major tear) and BRUFX. Combo Martin ratio >5 and UI >2 (short-term). I wonder if the two funds will continue in this vein. And I found out about DSENX via Snowball, woohoo. I should become a 0.75% adviser and put clients into them and nothing other....
Lipper puts VBINX in the Growth Allocation category. There are 113 such funds in its database ending January 2016, at least 10 years old, oldest share class only, open and closed.
VBINX stacks up pretty well. Here is list from top, sorted by 10 year annualized total return (APR), which includes expenses, reinvested dividends, and any max front load. (As always, no accounting for category drift or survivorship.)
It beat out Dodge & Cox Balanced DODBX, which has delivered 5% APR, placing it 41 out of 113.
Since 11/13, DSENX (inception date) and PONDX 50/50, much less 60/40, appear to significantly outperform most if not all of these --- except for PRWCX (which of course is on this major tear) and BRUFX. Combo Martin ratio >5 and UI >2 (short-term). I wonder if the two funds will continue in this vein. And I found out about DSENX via Snowball, woohoo. I should become a 0.75% adviser and put clients into them and nothing other....
Love DSENX and PIMIX...have nice allocations to both but could never bring myself to going all in on a 50/50 basis. I could see both imploding in a way I really can't see VWINX (PIMIX has had it's "moments" despite it's fantastic record) and DSENX relies on derivatives, so who knows.
Thanks so much for this encouraging response; but can you possibly elaborate on implosion hunches, scenarios and circumstances and any other thoughts or variables, if you have anything beyond gut feeling? (not arguing, just curious).
At some wealthier point, if my thesis continues successful, I will go to DSEEX and PIMIX, yes, and probably not 50/50, actually.
I also see that for the last 1y and 2y, the 50/50 combo beats or equals the mighty PRWCX, not that shortish periods are altogether conclusive. So maybe I have stumbled on a winner combo. Not that this is really original thinking .
Thanks so much for this encouraging response; but can you possibly elaborate on implosion hunches, scenarios and circumstances and any other thoughts or variables, if you have anything beyond gut feeling? (not arguing, just curious).
At some wealthier point, if my thesis continues successful, I will go to DSEEX and PIMIX, yes, and probably not 50/50, actually.
I also see that for the last 1y and 2y, the 50/50 combo beats or equals the mighty PRWCX, not that shortish periods are altogether conclusive. So maybe I have stumbled on a winner combo. Not that this is really original thinking .
I came across DSENX on this site thanks to you, David, and I've been happy with it, but I too would be nervous about putting 50% of my modest portfolio into it. All I have to back up my gut feeling is a general sense that a fund based on derivatives has an additional layer of risks (including counterparty, though Doubleline's site insists that risk is minimal), and that relatively simple quant strategies have a habit of working until they suddenly don't -- or in a best case scenario, until everyone figures out they work and the advantage is lost.
But I'd love to hear I'm wrong! I've been steadily adding to DSENX...
Since 11/13, DSENX (inception date) and PONDX 50/50, much less 60/40, appear to significantly outperform most if not all of these --- except for PRWCX (which of course is on this major tear) and BRUFX. Combo Martin ratio >5 and UI >2 (short-term). I wonder if the two funds will continue in this vein. And I found out about DSENX via Snowball, woohoo. I should become a 0.75% adviser and put clients into them and nothing other....
Love DSENX and PIMIX...have nice allocations to both but could never bring myself to going all in on a 50/50 basis. I could see both imploding in a way I really can't see VWINX (PIMIX has had it's "moments" despite it's fantastic record) and DSENX relies on derivatives, so who knows.
First off, I like and own both. As for going all in, DSENX is too new to draw any firm conclusions except that it seems to add some alpha without much downside risk. The closest analogy with a longer track record is the PIMCO stocks plus series. I think they too have had great run(s) but over very long periods of time the alpha is mostly lost. Whether the shiller pe aspect of DL adds alpha over time without significant risk, we'll have to see. PIMIX, while great is absolutely NOT a diversifier of stock risk as you would want in a bond fund holding 50% of your portfolio. It's had some bad moments, including this year, when you would want your bond fund to smooth out the volatility (VGLT up 7%; PIMIX down 1%). To me PIMIX should be treated more like a high yield offering rather than core bond. That said, PIMIX IS my second largest bond holding after Vanguard LT Tax Free.
All hail rather Snowball/MFO, responsible for uncovering DSENX, which has had surprisingly little press.
Roger about quant processes and also derivatives (maybe).
wxm, can you elaborate on nondiversification aspect of PONDX (the one I own)? Not disagreeing, just that VGLT (e.g.) has waaaay more swing to it, and PONDX is steadier than or outperforms FAGIX (of course), FSICX, and FTBFX. Maybe I should blend w/ BND or similar (?).
All hail rather Snowball/MFO, responsible for uncovering DSENX, which has had surprisingly little press.
Roger about quant processes and also derivatives (maybe).
wxm, can you elaborate on nondiversification aspect of PONDX (the one I own)? Not disagreeing, just that VGLT (e.g.) has waaaay more swing to it, and PONDX is steadier than or outperforms FAGIX (of course), FSICX, and FTBFX. Maybe I should blend w/ BND or similar (?).
tnx much.
PONDX/PIMIX are different classes of the same fund. The holdings are the same. As to diversification, I'm speaking of correlation to equities. Investment grade (particularly government bond funds like VGLT/TLT) frequently are used as safe havens and trade inversely to the stock market, particularly during panic sales like most of this year. You wanted to be heavy in VGLT till this week. PIMIX/PONDX tend to trade in the direction of equities, generally speaking.
hmm. Not seeing that as much as you are. I know about the Pimco classes, thanks. Just was looking at performance of the various bond funds I mentioned, not seeing clearly how to make a true diversification decision.
>> You wanted to be heavy in VGLT till this week.
Not starting in the fall of 2010 or two years later, or the spring of 2013. Or indeed the spring of last year. How far back are you looking?
hmm. Not seeing that as much as you are. I know about the Pimco classes, thanks. Just was looking at performance of the various bond funds I mentioned, not seeing clearly how to make a true diversification decision.
>> You wanted to be heavy in VGLT till this week.
Not starting in the fall of 2010 or two years later, or the spring of 2013. Or indeed the spring of last year. How far back are you looking?
David, I don't know about others...but for me yes, I prefer to be UP 7% (VGLT) when the stock market is down 6.5% (VTI). As for how far back...well ytd VGLT UP 7% PIMIX DOWN .8%; 3yrs VGLT UP 6.1% PIMIX UP 3.8%; 5yrs VGLT UP 9.7% PIMIX UP 7.7% Over the longer term I expect PIMIX will beat VGLT since rates will likely rise slowly over time (though who really knows), but it will likely run in the direction of the stock market and hence is not what one looks for in the bond portion of a balanced portfolio.
@wxman123 Sorry, a better question, looking at VGLT's large swings, would've been 'So you time it?' What happened to it in Jan of last year, meaning a sudden 10% rise, followed by a larger-than-that decline only 5 months later? I do see a fair degree of decorrelation, but would not want to attempt to diversify with something that swings to this degree, I think.
Comments
Regards,
Ted
-
Is the question seriously being heatedly asked if PPGFR (past performance guarantees etc.)? We know the answer to that: No.
Is it likely that outperforming balanced funds with long records and the same management will continue to outperform? We know the answer to that too --- sure it is likely in some sense, ... for the most part, ... within limits, ... given luck, ... and a whole host of other variables. This is the essence of mutual fund investing.
Will they do it every year, or every n years? No. Over the long haul, will GLRBX outperform, given the same decisionmakers? Likely.
How likely is likely? Who knows? It is unknowable. PPDNGFR.
If you're uncomfortable or flummoxed or upset with all this mishmash of variables, hopes, predictions, anxieties, but still determined to make some conclusive statements or other, forget it --- and please, please, please do go w indexing, and stop publicly fretting the odds. Horse is buried, dug up, eaten, then reburied.
VBINX stacks up pretty well. Here is list from top, sorted by 10 year annualized total return (APR), which includes expenses, reinvested dividends, and any max front load. (As always, no accounting for category drift or survivorship.)
It beat out Dodge & Cox Balanced DODBX, which has delivered 5% APR, placing it 41 out of 113.
Here is same list based a Martin Ratio, which is the risk return adjusted metric used to computed MFO Return Group ratings. Martin is excess total return over 90 day TBill divided by Ulcer Index, as described in the paper by Peter Martin, entitlded: An Alternative Approach to the Measurement of Investment Risk & Risk-Adjusted Performance.
If we look across all the asset allocation categories, VBINX ranks even better.
MFO groups the following categories as Asset Allocation (AA) type: Target Today, Target 2010, Target 2015, Target 2020, Target 2025, Target 2030, Target 2035, Target 2040, Target 2045, Target 2050, Target 2055+, Conservative Allocation, Moderate Allocation, Growth Allocation, Aggressive Growth Allocation, Absolute Return, Convertible Securities, Flexible Portfolio, Retirement Income.
There are 470 such funds ending January 2016, at least 10 years old, oldest share class only, open and closed.
Here's how VBINX stack up on that list, again, by APR:
I wonder if the two funds will continue in this vein.
And I found out about DSENX via Snowball, woohoo. I should become a 0.75% adviser and put clients into them and nothing other....
VBINX is a so-called "Reference Fund" in the MFO Ratings system, thanks to David.
A sort of bench mark fund of which we should all be cognizant.
And, thanks to shipwreckedandalone and many of contributors to this thread, we remain so.
c
At some wealthier point, if my thesis continues successful, I will go to DSEEX and PIMIX, yes, and probably not 50/50, actually.
I also see that for the last 1y and 2y, the 50/50 combo beats or equals the mighty PRWCX, not that shortish periods are altogether conclusive. So maybe I have stumbled on a winner combo. Not that this is really original thinking
But I'd love to hear I'm wrong! I've been steadily adding to DSENX...
>> thanks to you, David,
All hail rather Snowball/MFO, responsible for uncovering DSENX, which has had surprisingly little press.
Roger about quant processes and also derivatives (maybe).
wxm, can you elaborate on nondiversification aspect of PONDX (the one I own)? Not disagreeing, just that VGLT (e.g.) has waaaay more swing to it, and PONDX is steadier than or outperforms FAGIX (of course), FSICX, and FTBFX. Maybe I should blend w/ BND or similar (?).
tnx much.
>> You wanted to be heavy in VGLT till this week.
Not starting in the fall of 2010 or two years later, or the spring of 2013. Or indeed the spring of last year. How far back are you looking?
Sorry, a better question, looking at VGLT's large swings, would've been 'So you time it?'
What happened to it in Jan of last year, meaning a sudden 10% rise, followed by a larger-than-that decline only 5 months later?
I do see a fair degree of decorrelation, but would not want to attempt to diversify with something that swings to this degree, I think.