VanEck: (LFEQ eft Fund) Risk Management For All Markets

bee

Interesting and readable article. The last one caught my eye... As long term investors, we will spend 70% of time in a bear market or recovering from one:

Topics covered:

- An introduction to the importance of market breadth measurements
- The construction behind the Ned Davis Research CMG US Large Cap Long/Flat Index (NDRCMGLF)
- Risk management during bull and bear markets and navigating secular trends—only 54% of time spent in bull markets historically
- The merciless mathematics of loss; negative performance requires a larger percentage of returns than what was lost to break even
- 70% of time spent in a bear market or recovering from one

etf.com/sections/etf-industry-perspective/vaneck-risk-management-all-markets

Also interesting is inflation's impact on real returns:

1966 to 1982 was a different secular bear experience. While the decline over the 16-year period was -1.5% annualized per year, it was a period that experienced high inflation. Therefore, while $100,000 declined to $78,520, after factoring in a real after-inflation return of -7.9%, $100,000 declined in spending value to just $26,801.

LFEQ has had a very short life (October of 2017)...we may need a bit more time to test this fund's mettle.

rforno

The reading is interesting but the fund is questionable imho.

According to M* LFEQ is 80% in Vanguard's S&P 500 ETF (VOO) and 20% in cash. Not sure it's worth the .59 ER when holding cash is free and VOO is .04% ER.....

bee

I hear you @rforno. Though one could rationalize a management fee for decision making the spread is a very nice management fee for the manager of this fund.

Look at ROTAX (an Alphacentric fund that "manages" a rotation strategy)...ER of 1.62% invested 100% in VWO. And then there are those "managed fund of funds"... managed mutual funds that owns managed mutual funds.

Buyer beware.

MikeM

According to M* LFEQ is 80% in Vanguard's S&P 500 ETF (VOO) and 20% in cash. Not sure it's worth the .59 ER when holding cash is free and VOO is .04% ER.....

I only skimmed the article, but what I think I see is you are paying the .59% for their systematic trend/risk process (expertise) for moving in or out of equities, not for an index ETF like VOO. That said, I'm personally not interested in any of these alternative-type funds. For every good one there are probably 20 that won't do any better then a typical balanced fund - probably worst.

Been burnt a couple times on these alternative funds, so my stance is the same as George Bush's.

Ted

@bee: Have a very merry Christmas!
Regards,
Ted
https://www.mutualfundobserver.com/discuss/discussion/37181/vaneck-risk-management-for-all-markets#latest

bee

@Ted,
My humble apologies...Nothing like a little egg-nog on my face...Cheers!