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Reply to @MaxBialystock: What is the problem? This is normal for bonds which unlike equity has a definite end date (maturity). Bonds mature and gets replaced with new ones. The turnover will probably be higher as duration of the fund is shortened.
Per MWTRX's prospectus: PRINCIPAL INVESTMENT STRATEGIES
The Fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets in investment grade fixed income securities or unrated securities that are determined by the Adviser to be of similar quality. Up to 20% of the Fund’s net assets may be invested in securities rated below investment grade. The Fund also invests at least 80% of its net assets plus borrowings for investment purposes in fixed income securities it regards as bonds. Under normal conditions, the portfolio duration is two to eight years and the dollar-weighted average maturity ranges from two to fifteen years. The Fund invests in the U.S. and abroad, including emerging markets, and may purchase securities of varying maturities issued by domestic and foreign corporations and governments. The Adviser will focus the Fund’s portfolio holdings in areas of the bond market (based on quality, sector, coupon or maturity) that the Adviser believes to be relatively undervalued.
Investments include various types of bonds and other securities, typically corporate bonds, notes, collateralized bond obligations, collateralized debt obligations, mortgage-related and asset-backed securities, bank loans, money-market securities, swaps, futures, municipal securities, options, credit default swaps, private placements and restricted securities. These investments may have interest rates that are fixed, variable or floating.
Derivatives will be used in an effort to hedge investments, for risk management, or to increase income or gains for the Fund. The Fund may also seek to obtain market exposure to the securities in which it invests by entering into a series of purchase and sale contracts or by using other investment techniques.
Don't know from this what pushes the turnover. As a compare, Gundlach's DBLTX fund, which is mostly mortgage stuff has a reported turnover of 15%.
I tend to agree with Investor as to turnover and what the managers choose to sell and replace with other issues.
PONDX, has a 311% turnover reported; but this fund uses lots of special tools, so this may be part of the turnover reporting, too.
If you are pleased that MWTRX fits your bill in this space of fund holdings, I would not be concerned about the turnover. Do your homework to match this fund with all others in this space.
AndyJ, thanks for the information. The purchase would in fact be for an IRA account, but the problem is I would prefer to purchase the fund through Vanguard Brokerage and DBLEX carry's a $35 transaction fee, while DLENX is a no transaction fee fund.
I also have an account with Schwab where theologically I can save the 30 basis points by purchasing DBLEX and it is a NTF fund, but I would need to sell my current holding in my IRA account which I really do not want to do.
Reply to @Mona: Depending on how much you're investing, the difference in E.R. could offset the transaction fee in a reasonable amount of time.
In my case, I have an IRA directly with DBL, since I'm as sure as I ever am that they'll have a fund I want to keep in an IRA for the foreseeable future, even if the EM fund were to hit a rough patch.
Thanks, guys. But my concern with turnover is that a high turnover number = lots of "taxable events," no? I might or might not get a tax-sheltered account,
Reply to @AndyJ: Forgive my confusion. Total portfolio is 40% in stocks/relatively high volatility bonds/EM debt? Now, slightly over half is in EM debt or EM equity? I really like the idea of monitoring the premiums in CEFs to somewhat avoid bandwagons. DCAing seems to help by not buying a big slug of anything to quickly. I like to use new money to rebalance.
Reply to @MikeM2: Hi Mike, to explain further, the way I do the portfolio is a bit complicated because I vary the stake in risk assets within the band I mentioned. Right now I have 22% of my total portfolio, aggregated at the fund level, in risk assets, of which 40%, or about 9% of the total portfolio including risk-off assets, is in dedicated emerging markets stock and bond funds. Of that 40%, most of it (3/4 roughly) is with Matthews and Seafarer in their lower-risk stock and stock-plus funds.
I allow myself enough variation that I could go to about 25% of the total portfolio in EM stocks if I think the conditions warrant; I've owned more than that in the past. Just now I'm being more conservative than normal because of the state of the global economy.
The only EAFE-y fund I own is Artisan International Value, ARTKX, and that's a long-term position.
Comments
Per MWTRX's prospectus: PRINCIPAL INVESTMENT STRATEGIES
The Fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets in investment grade fixed income securities or unrated securities that are determined by the Adviser to be of similar quality. Up to 20% of the Fund’s net assets may be invested in securities rated below investment grade. The Fund also invests at least 80% of its net assets plus borrowings for investment purposes in fixed income securities it regards as bonds. Under normal conditions, the portfolio duration is two to eight years and the dollar-weighted average maturity ranges from two to fifteen years. The Fund invests in the U.S. and abroad, including emerging markets, and may purchase securities of varying maturities issued by domestic and foreign corporations and governments. The Adviser will focus the Fund’s portfolio holdings in areas of the bond market (based on quality, sector, coupon or maturity) that the Adviser believes to be relatively undervalued.
Investments include various types of bonds and other securities, typically corporate bonds, notes, collateralized bond obligations, collateralized debt obligations, mortgage-related and asset-backed securities, bank loans, money-market securities, swaps, futures, municipal securities, options, credit default swaps, private placements and restricted securities. These investments may have interest rates that are fixed, variable or floating.
Derivatives will be used in an effort to hedge investments, for risk management, or to increase income or gains for the Fund. The Fund may also seek to obtain market exposure to the securities in which it invests by entering into a series of purchase and sale contracts or by using other investment techniques.
Don't know from this what pushes the turnover. As a compare, Gundlach's DBLTX fund, which is mostly mortgage stuff has a reported turnover of 15%.
I tend to agree with Investor as to turnover and what the managers choose to sell and replace with other issues.
PONDX, has a 311% turnover reported; but this fund uses lots of special tools, so this may be part of the turnover reporting, too.
If you are pleased that MWTRX fits your bill in this space of fund holdings, I would not be concerned about the turnover. Do your homework to match this fund with all others in this space.
Take care,
Catch
AndyJ, thanks for the information. The purchase would in fact be for an IRA account, but the problem is I would prefer to purchase the fund through Vanguard Brokerage and DBLEX carry's a $35 transaction fee, while DLENX is a no transaction fee fund.
I also have an account with Schwab where theologically I can save the 30 basis points by purchasing DBLEX and it is a NTF fund, but I would need to sell my current holding in my IRA account which I really do not want to do.
Mona
In my case, I have an IRA directly with DBL, since I'm as sure as I ever am that they'll have a fund I want to keep in an IRA for the foreseeable future, even if the EM fund were to hit a rough patch.
I really like the idea of monitoring the premiums in CEFs to somewhat avoid bandwagons. DCAing seems to help by not buying a big slug of anything to quickly. I like to use new money to rebalance.
I allow myself enough variation that I could go to about 25% of the total portfolio in EM stocks if I think the conditions warrant; I've owned more than that in the past. Just now I'm being more conservative than normal because of the state of the global economy.
The only EAFE-y fund I own is Artisan International Value, ARTKX, and that's a long-term position.