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DSEEX and DSENX: Pay the Piper

After several years of almost no year-end distributions, this year the tax man cometh. NAV is around $15.50 and the total distribution is estimated at about $1.65. Ouch. Still, it's hard to complain about the performance. The ETN, CAPE, does not make big distributions.

For a really tax-efficient, winning equity fund, check out AKREX.


  • No problem in a Roth account but I will look into your post more carefully.
  • edited December 2018
    @BenWP Thanks for the heads up. I currently own both funds in a taxable account. This distribution will help me transition to my projected 2019 allocation which includes a little more AKREX (and FBSOX) and a little less DSENX in my US Stock Pot.
  • Just a couple of thoughts:
    1) You can't rightfully compare an ETN to a mutual fund. The ETN is dependent upon the credit worthiness of the issuer, something mutual fund holders typically don't care to deal with.
    2) If you were suggesting that we compare a large-cap growth fund AKREX to a small-cap value fund DSENX, well you see the problem there, Both are fine funds in their own right, best held for different reasons which only the potential investor can determine.
  • edited December 2018
    @Mark Its interesting M* is now listing the holdings of DSENX as small cap though they still categorize it as Large Value. I wonder what if anything has really changed with their investments to warrant that change? Per their 10/31/18 Fact Sheet, the median market cap was 22.0 billion and the average market cap was 62.1 billion. That makes for an odd small cap fund.....
  • @Mark: True about the nature of an ETN. I was not making a comparison, but pointing out one difference between the ETN and OEF. I believe M* has now characterized DSENX's investing style as SCV, but the fund itself is called LV; other participants on this board have collectively scratched their heads when trying to figure out in what pigeon hole to put it. IMHO, it fits no where convenient.
  • M* has screwed up the categorizations of DSE_X, from the getgo, I think.

    It algorithmically churns SP500, as CAPE-plus vehicle, so never ever SC. LCV is always reasonable, since valuation drives the algorithm.
  • Just because a fund claims its strategy is value-driven doesn't mean that it should be classified as value according to "traditional" metrics (P/E, P/B, PEG ratio, etc.). For example, Bill Miller's LMVTX often (usually?) fell into the LCG box as measured by these metrics.

    Likewise, DSENX may be value-driven, but in a rather unusual way. The index it is leveraging compares the present value of each sector with its historical record to determine whether and by how much the sector is undervalued. So it could invest in four sectors normally thought of as growth sectors, so long as they were only "somewhat" overpriced as compared with their historical "exceedingly" overpriced.

    The bottom line, though, is that M* X-ray shows 100% of the fund's equity holdings as "not classified". For all we know, M*'s oh-so-reliable software is simply defaulting to SCV when it doesn't have any data to go by.
  • >> value-driven ... in a rather unusual way
    >> so long as they were only "somewhat" overpriced as compared with their historical "exceedingly" overpriced.

    very good

    should propose to Lipper a new category, ULCV
  • DSE_X down almost 8% today

  • Taking into account cap. gains and dividends DSENX is up today.
  • edited December 2018
    Wonder why in 2018 this cannot be accounted for in real time ...
  • I just don't understand why DSENX hasn't been generating a big tax hit all these years, with its regular rebalancing. I guess the derivatives somehow save on taxes? I hold it in a Roth IRA, so I'm just curious.
  • @expatsp: That would be a good question for Mr. Snowball to ask DSENX, yes ?
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