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DSENX has performed well during its nearly 4 years of existence.

I use the S&P 500 as a benchmark for this fund. Not an ideal benchmark, but for me, close enough. I've noticed that, over the past year or so, DSENX is barely outperforming the S&P 500.

I'm not going to make a sell decision based on the last year's performance, but I'm wondering how much longer DSENX's outperformance can last. Any ideas?


  • YTD DSENX outperformed S&P 500 by 2%. It is not bad at all and I would be satisfied if it continues that way.
  • Do a search (include DSEEX) and you will see some discussion of this.
  • The European version, DLEUX, is quietly doing well this year. Shorter track record than DSEEX. However, both funds have not faced a severe downturn as in 2008.
  • You probably have your expectations set a little too high. Beating the S&P every year -- even by a little bit -- is near impossible and too much to ask for any fund. If you aren't going to match the market, the best you should hope for is to outperform the market over a "whole market cycle" (i.e. to the next bear market).

    This fund is similar to Pimco's RAE Fundamental PLUS Fund (PIXDX / PXTIX) -- both are large cap US stock funds based on a value-investing methodology, and invest via derivatives backed by bonds to boost their returns. Looking at the two funds, DSENX / DSEEX has clearly outperformed so it seems to be doing just fine.

    Last point is that it will likely be helpful for you to keep track of whether the fund's performance is due to the valuation methodology (CAPE index) or the bond portfolio return. I assume you can find this in the commentary or shareholder reports. It's possible that the bond side isn't working out for a period and ends up dragging down the fund return, but the stock side is still fine. Or the stock side could be lagging but it is being propped up by the bond wizard's magicks.
  • Can't find the post where someone interestingly pointed out what happens w/ DSEEX / DSENX when US LCV persistently lags (a bit), but graphs are here (I added div etfs for the heck of it):


    and 1y, with RPG and SPY pulling even or outperforming (I know RPG is equal weighting):{"zoomKey":6,"version":"US","showNav":true,"defaultShowName":"name","mainSettingId":"main","navSettingId":"nav","benchmarkSettingId":"benchmark","sliderBgSettingId":"sliderBg","volumeSettingId":"volume","defaultBenchmark":false,"id":"F00000QBBZ|F00000MVE2|FEUSA04AF8|FEUSA04ABY|F00000Q6JF|FEUSA04AEW|F00000OVWX|FEUSA00001","type":"FO|FE|FE|FE|FE|FE|FE|FE","region":"USA","name":"XNAS:DSEEX|ARCX:SCHD|ARCX:VIG|ARCX:DVY|ARCX:NOBL|ARCX:RPG|ARCX:CAPE|ARCX:SPY","baseCurrency":"USD","defaultBenchmarks":["",""],"chartType":"growth","startDay":"10/14/2016","endDay":"10/14/2017","chartWidth":955,"SMA":[]}
  • @claimui, DSENX/DSEEX outpaced PIDIX/PXTIX every year since inception in 2014. Also the expense ratio is lower as well. What is your opinion on the European version, DLEUX, of DSENX/DSEEX that was launched two years ago?
  • edited October 2017
    DLEUX is only about 10 months old. Is not doing anything really special to stand out against its benchmark. IShares IEUR is doing just slightly better at this point.
  • I looked at DLEUX but decided that I didn't want to make what I would call a sector bet with European.
  • Update on my October, 2017 post For the past year, DSENX's performance lags the S&P 500 by 3.66%, as measured by Lipper. Again, the S&P 500 may not be a fair comparison and I'm not going to make a sell decision on one year's performance, but can anyone offer some guidance as to why DSENX has been performing so poorly lately and whether it may outperform again due to a reversal of whatever circumstances that has caused it to recently underperform? Thanks!
  • One can decompose DSENX into three components:
    1) CAPE
    2) Bond fund + leveraging costs (i.e. cost of getting the roughly 100% extra cash to buy the bonds)
    3) ER

    Over the past year, DSENX has underperformed CAPE by about 0.75%. (CAPE in turn has underperformed the S&P 500 by about 3% - others can look into that.)

    Intermediate term bonds have returned virtually nothing over the past year. While one can't easily say how PIMCO is managing its bond sleeve, that at least gives us a ballpark sense of the bond market. Subtract off leveraging costs, and it's easy to see where this fund could lose a percent or even a couple from its bonds.

    Add another 0.4% cost above that of CAPE, and altogether it's not hard to see this fund underperforming CAPE by 0.75% (at least), which in turn underperformed the S&P 500 by 3%.
  • @Bitzer, it's bench mark is large value, not the S&P 500. Against it's benchmark, the LV category, it is not performing poorly. Seems LV may be taking a pause right now with higher than normal valuations.
  • @msf and @MikeM Thanks for the replies. I may be contradicting myself by saying this, but I don't make sector bets. Perhaps mistakenly, I treat DSENX as a core holding and that's why I compare its performance to the S&P 500 or a domestic multi-cap core index fund holding (VTI, in my case) Time for me to decide whether I want to get out of the LV (with a bond component) sector

  • DSENX , M* category indeed is listed as lg.cap value, while "investment style" is noted as "small growth".
    Chart compare, total 1 year returns for DSENX , CAPE , and my choice of etf JKF.,CAPE,JKF&p=5&O=011000
  • @catch22: I hit the go button & still waiting for chart .
  • Hi @Derf
    "Go" button, so I presume you're using a smart phone or pad.
    Hmmmm.....I don't know what to add. I "click/check" the links immediate after posting and it is normal then and again now. I am accessing via laptop, which should not make any difference. I just checked with Samsung phone (encrypted Wi-Fi) and link connected to chart properly.
  • @Derf

    For the 1 year period:
    DSENX = +10%
    CAPE = + 10.8%
    JKF = +8.5%

    JKF is by no means a pure compare for the other 2; but gives a reference point if one were invested in large value index type.
    I imagine there exists any number of configurations for large value indexes.
    I "see" only the 5 digit tickers are currently highlighted and clickable.

    *****JKF The iShares Morningstar Large-Cap Value ETF seeks to track the investment results of an index composed of large-capitalization U.S. equities that exhibit value characteristics.
  • edited May 2018
    The user and all related content has been deleted.
  • edited May 2018
    For sure with its automatic monthly 'value churn', CAPE should underperform SP500 at times, and certainly has recently.

    As for the effects of the bond sauce, which are not large, I get the following, rounded, total (unless I'm reading my calculator wrong, always a possibility):

    ytd - underperforming CAPE by 0.6%
    1y - underperformed CAPE by 0.7%
    2y - outperformed CAPE by a thin hair
    3y - underperformed CAPE by 0.7%
    4y - outperformed CAPE by 1%
    4.5y (since inception) - outperformed CAPE by 2.6%

    DSEEX better than the above, of course, but the last year and ytd it lags CAPE too.

    It appears the ER-covering bond sauce is getting staler.

    Yes, M* appears to have the style box wrong.

    >> investing in ... price movements of an index or indices which have expiration dates, and the ability of a management team to maneuver within the volatility of those expiration dates.

    Huh. Is that a useful way to characterize it?
  • The user and all related content has been deleted.
  • Dunno about either; figured you would explain further and more exactly re 'ability of a management team to maneuver within the volatility of those expiration dates' --- management's processes and dynamics and timing. The monthly churn (CAPE) is not subject to maneuvering, I think.

    There are prior extensive descriptive writeups on this forum, from (I believe) ~12 and ~13 mos ago. Thought you knew, since you sounded as if you did.
  • The user and all related content has been deleted.
  • Thanks; I know all this, meaning (only) that I know what CAPE says about how it works and what DSE_X says about how it works.

    Since w/ the mfunds it happens automatically monthly, I was simply trying to grok your

    >> investing in ... the ability of a management team to maneuver within the volatility of indices' expiration dates.

    and now

    >> CAPE ... tries to predict an index's prices

    iff different from how all earnings-based investing hopefully works. That's all.
  • DSENX upside/downside ratios definitely don't look too attractive. I'm treating it just like any other fund to take profits when i must.
  • MikeM said:

    Bitzer, it's bench mark is large value, not the S&P 500. Against it's benchmark, the LV category, it is not performing poorly. Seems LV may be taking a pause right now with higher than normal valuations.

    I respectfully disagree on the benchmark, and am admittedly out of the mainstream here.

    The CAPE index rotates among all sectors of the domestic market, not just ones that focus on value stocks. Its method of selection is not to pick stocks or sectors that are undervalued relative to the market. Rather, it selects sectors, including growth sectors, that are undervalued relative to themselves - relative to their historical (perhaps high) valuations. Its fishing pond, so to speak, is the entire S&P 500.

    Thus, IMHO, that is the appropriate benchmark. In addition, that is the benchmark (aside from the CAPE US Sector index) selected by the fund itself to benchmark its performance. See summary prospectus.

    Buying heavily into blend or even growth stocks (relative to the market) is not merely hypothetical. Here is the most recent sector allocation disclosure of DSENX (March 31, 2018 portfolio). Using iShare ETFs as proxies for the S&P 500 sectors, the allocation was:
    Consumer Staples (XLP): 25.13%
    Consumer Discretionary (XLY): 25.10%
    Healthcare (XLV): 24.99%
    Technology (XLK): 24.78%

    A M* instant X-ray shows a portfolio that's 31% value (29% large cap), 30% blend (27% large cap), and 39% growth (38% large cap).

    If you want to call this value investing, that's fine, but it's a different way of viewing value than M* or Lipper use - they look at the portfolio and compare it to the market as a whole (using standard metrics like P/E). So do the companies like S&P and Russell that define the value benchmarks. Viewed through this lens, the CAPE US Sector Index doesn't resemble value funds all that well.
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