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@Bobpa. Not long ago you came to the board seeking thoughts on equity income funds. A number of MFO members responded to you including myself. You failed to thank us for out thoughts in response to what you had asked. With this ... I have no comment for you on this post other than what I have made above.
Charges of ingratitude aside, you could elaborate and pose a question or an answer or an observation; that would be helpful. And there is a search function, which if you employ you will see a fair number of postings about HOBEX details and behaviors.
Just different personalities @Bobpa. Personally, my recommendations don't need validation so that wouldn't bother me (I have a smaller ego maybe?). Keep participating. Everyone gleans something from these types of posts and subsequent replies.
HOBEX - New fund in 2016, so probably not a lot on it yet. Appears they’re trying to generate decent income while hedging against rising rates. That’s a tough act to pull off. The 1.84% ER is high but not unusual for this type of fund. Likely the strategies employed are expensive. The 138% turnover rate doesn’t help matters, but, unfortunately, that’s also typical of many alternative investment strategies. Here’s how Lipper describes the fund:
“The Fund seeks to provide current income, with a secondary objective of capital preservation in a rising interest rate environment. It will allocate its portfolio in fixed income securities through the purchase of closed end investment companies and exchange-traded funds that invest in income producing securities.” http://www.funds.reuters.wallst.com/US/funds/overview.asp?symbol=HOBEX.O
I like to look at MaxFunds along with Lipper and M* for insights. MaxFunds is sometimes wrong - but “never in doubt” (willing to go out on a limb with their projections). Their rating for HOBEX is +2 out of 100. http://www.maxfunds.com/funds/data.php?ticker=HOBEX&pg=d
Not sure how you came by this fund - possibly thru some employer’s plan. My take is that the problem with the fund probably relates as much to the high-wire act they are trying to execute and the high fees and trading costs as with management. Along a similar vein, Price has a new hedged income offering, TMSRX, also with lackluster results, but having a lower 1.37% ER (and somewhat lower turnover rate).
@Hank this fund was discussed here over the summer and Dennis profiled it in the July(?) monthly commentary. I held the fund all of 2 or 3 days when I realized they held MLPs. Good fund and a good manager with an excellent track record But I stay as far away as possible from any fund that holds MLPs regardless of how small or large that holding may be. But that is just me. It had a pretty bad drawdown the last quarter, at least by my standards.
Thank you @Junkster. Since it was discussed here (which I didn’t realize) might explain how @Bobpa happened to hear about / or buy it.
Anytime I see 138% turnover / 1.84% ER have to wonder what in the world are they trying to do ... But I can understand to a degree people seeking out alternatives for various reasons. Unfortunately, have yet to see one that’s worth its salt.
Yes, I remember when Kinder Morgan MLP shareholders received significant income in taxable and non-taxable accounts when the MLPs were converted into Kinder Morgan stock.
Comments
“The Fund seeks to provide current income, with a secondary objective of capital preservation in a rising interest rate environment. It will allocate its portfolio in fixed income securities through the purchase of closed end investment companies and exchange-traded funds that invest in income producing securities.” http://www.funds.reuters.wallst.com/US/funds/overview.asp?symbol=HOBEX.O
I like to look at MaxFunds along with Lipper and M* for insights. MaxFunds is sometimes wrong - but “never in doubt” (willing to go out on a limb with their projections). Their rating for HOBEX is +2 out of 100. http://www.maxfunds.com/funds/data.php?ticker=HOBEX&pg=d
Not sure how you came by this fund - possibly thru some employer’s plan. My take is that the problem with the fund probably relates as much to the high-wire act they are trying to execute and the high fees and trading costs as with management. Along a similar vein, Price has a new hedged income offering, TMSRX, also with lackluster results, but having a lower 1.37% ER (and somewhat lower turnover rate).
Anytime I see 138% turnover / 1.84% ER have to wonder what in the world are they trying to do ...
But I can understand to a degree people seeking out alternatives for various reasons. Unfortunately, have yet to see one that’s worth its salt.
Here is a reminder of that incident:
https://www.investopedia.com/articles/financial-advisors/010516/mlp-investors-hit-surprise-tax-bill-ira-income.asp
Here is a link for Cramer on the same issue:
https://www.thestreet.com/story/11544379/1/cramer-on-retirement-can-master-limited-partnerships-hurt-your-ira.html