Seeking Yield With Safety

davfor

Lipper categories with low risk and moderate to high yields are listed. Top-ranked funds within the categories are listed.

Over a thousand funds are ranked using Mutual Fund Observer Screens based on risk, risk-adjusted returns, quality, momentum and yield.

Top-ranked funds from Charles Schwab, Fidelity, and Vanguard are listed as well as other mutual fund families, exchange traded funds and closed end funds.

Funds with low risk and yields above 2% are highlighted.

https://seekingalpha.com/article/4378592-seeking-yield-safety

Sven

Thank you - good list to consider. Charles Bolin also writes for MFO Commentary.

Old_Joe

Very nicely done. Thank you.

Sven

My mistake. It should be Charles Bolin.

davidrmoran

(you can edit posts, you know)

I need more exec sum for this piece

sma3

I found this very useful, but the yields now on almost all the funds are much lower now. I also looked the drawdowns this year based on M* charts. VBISX dropped 1.9% in March, but MFO max DD is listed as only 0.1.

Does anyone know why? This was within a month, but I assumed Max DD were date aganostic

catch22

@Charles for @sma3 and the question, eh?

Thank you, @sma3 for this observation.

Sven

it is important to note the dates when MaxDD data is obtained.

Don't know the start and ending dates for M*. it a single day or over a week or month? MFO Premium listed the MaxDD for Cycle 6 - starting 202001 (Jan 1, 2020) and ending 202008 (August 30, 2020).

sma3

But if the statistic really is the biggest drop during any period of time it will not matter if you pick the last 12 months, the first six months of the year or the exact time the market crashed ( Stocks 2/19 to 3/20) Bonds (3/6 to 3/25)

Sven

MFO also measures the recovery period in months within a full cycle. This cycle is short (7 months) but very sharp. I also noted the difference as well.

Perhaps @Charles can explain the differences.

lynnbolin2021

Greetings @Sven, @Catch22, @sma3, @Old_Joe, Sorry for the delayed response. Maximum drawdown is based on the time period, and also month data. Yes, the maximum drawdown will tend to be less than daily periods. For most investors daily deviations are not as critical as drawdowns relative to other funds over the same time period.

A second topic that came up is yields. There is the SEC Yield and trailing twelve month yields. Some funds pay annual dividends and others pay one time dividends. Why should you care? Take GAVIX. The forward yield is 7.1%, the four year average yield is 6%, the dividend is $1.1 per share. The yield in MFO and Morningstar is 0.0%. This one caught me by surprise.

Best Wishes
Charles (Lynn)

msf

lynnbolin2021 said:

A second topic that came up is yields. There is the SEC Yield and trailing twelve month yields. Some funds pay annual dividends and others pay one time dividends. Why should you care? Take GAVIX. The forward yield is 7.1%, the four year average yield is 6% ...

The fund paid no income divs in 2018 or 2019. In 2016 it paid $0.07523/share with a reinvestment price of $14.73 (0.51%), and in 2015 it paid $0.06761/share with a reinvestment price of $13.54 (0.50%). That's an average dividend yield of 0.25% over the past four years.

Even if one includes cap gains, distributions over the past four years were:
2019: $0.90414 reinvested at $13.21 (6.84%)
2018: $0.83899 reinvested at $12.71 (6.60%)
2017: $0.49539 reinvested at $14.73 (3.36%)
2016: $0.479321 reinvested at $13.54 (3.54%)

The cap gains in 2018 and 2019 (there were no dividend distributions) did average 6%+, but over four years I can't see how, even after adding income divs and cap gains together, one could average 6%.

My data source is Fidelity's distribution page for the fund. I've verified the total distribution figures at the source: https://knowledgeleadersfunds.com/

Sven

Thanks to Fed Chairman Powell yields on many bond funds are much lowered today. It is nuts that income investors have to incur additional risk either on credit quality, duration, or currency (foreign bonds) in order to get a bit more yield. These days I am rely more on active managed allocation funds.

lynnbolin2021

@msf
Thank you for this clarification. I was including capital gains. Here is my source.

https://seekingalpha.com/symbol/GAVIX/dividends/scorecard

Tarwheel

Here is the best way I’ve found to get guaranteed 2% return that is totally safe right now. Purchase everything you can with a cash-back credit card - groceries, gasoline, clothes and other necessities. My Fidelity Rewards VISA gives us 2% back on all purchases, and other cards we own give back 3-5% on selected items (gas, restaurants). Most of these items are things we need to buy and would have bought with checks or debit cards in the past. So far this year, we’ve received more that $700 from our Fidelity card alone. To earn this much yield from a money market or savings account currently, you would need to invest hundreds of thousands of dollars.

Derf

Nothing like paying forward your cash back rewards ! You pay one way or another for the use of credit cards.
Charge it I do, Derf

FD1000

Yep, I have been using Fidelity CC 2% cash back and Penfed CC 5% cash back on all gas for years. We charge all we can from $1 to paying our property taxes with no additional fees.
But, that's not really the subject of this thread

As part of my goals and style I mainly use bond funds + trading on momentum. I'm concentrated on total returns and not higher income but I have noticed that I used funds such as PIMIX for years until 01/2018 and since then SEMMX,IOFIX,EIXIX,HOBIX,JASVX and they pay at least 4%. I'm not a long term holder but a trader and avoided the big losses of March 2020.

bee

@FD1000

I'm not a long term holder but a trader and avoided the big losses of March 2020.

Were they really big losses?

If you had instead, not sold and just held your positions the draw down for JASVX was 6% in March of 2020. By May of 2020 you would have recovered from that loss without timing the market.

Had you been taking monthly withdrawals, those withdrawals would have been impacted slightly over 2 months. Having a 3-6 month cash position for withdrawals would solve that problem.

To be fair, IOFIX and SEMMX have yet to recover. Owning these two funds (that exhibit deep draw downs and slow recovers) may not the best choice for those seeking "yield with safety". I learn this the hard way owning THOPX.

Crash

It feels very unlikely, foreign, to me. And I've never thought of doing such a thing, before we opened our Navy FCU account, then added American Express under the Navy brand. Then, I was getting hit with foreign transaction fees with our Visa card. But Navy doesn't charge FTF with THEIR Visa, so we switched to Navy. I like to see the cash awards growing in the account. We pay zero attention to the promotions and deals. We stick to the cash-back awards. Then we can choose for ourselves what we want to use it for... These days, we're saving for the niece's university expenses. But she can't take the "hands-on" classes these days, with Covid. So, the money is just sitting there for her, and growing. Amex offers 3X rewards for some stuff, 2X rewards for others, and 1X for everything else. ... The Visa offers 1.5 points for EVERYTHING.
Here's a link. You must have a military affiliation, but that connection doesn't have to be very "tight."
https://www.navyfederal.org/

carew388

I'm a retired DOD civilian annuitant and I qualified for a checking account and credit card from NFCU.

Crash

That's great! .....Now, if you care to do it, there's a $3,000.00 limit, but you could take that much and buy a CD at 3.5%.

FD1000

bee said:

@FD1000

I'm not a long term holder but a trader and avoided the big losses of March 2020.

Were they really big losses?

If you had instead, not sold and just held your positions the draw down for JASVX was 6% in March of 2020. By May of 2020 you would have recovered from that loss without timing the market.

Had you been taking monthly withdrawals, those withdrawals would have been impacted slightly over 2 months. Having a 3-6 month cash position for withdrawals would solve that problem.

To be fair, IOFIX and SEMMX have yet to recover. Owning these two funds (that exhibit deep draw downs and slow recovers) may not the best choice for those seeking "yield with safety". I learn this the hard way owning THOPX.

JASVX - Hindsight is a great thing when you can look back until today
I have used PIMIX until 01/2018, SEMMX for most of 2018 and then IOFIX in 2019+2020. HOBIX,JASVX are funds I started using in 2020.
The above are all mentioned on my thread (link)
JASVX - at least one of the managers came from SEMMX but it did much better than SEMMX. I love fresh new funds where the managers can do better.
These funds can have very good risk/reward for months, even years, until markets are volatile and why I exit. VIX > 35-40 is a good indicator of that.

bee

@FD1000

A short track record is not one of my "must haves". A long successful history is also never a sure thing going forward, but a fund like MWTRX continue to impress since 1998.

FD1000

I never promote must have of anything. Each investor should do whatever they feel comfortable about. I'm a trader for 20 years with a great track record. I'm not your typical trader, I'm trading mutual funds based on momentum and good risk/reward. My trading habits are a lot faster now than 10-15 years ago.

MWTRX is a good fund but GIBLX has a better record for 1-3-5 years.
Both are not funds I use since I'm mainly a bond investor in the last several years and their past performance (6% average for 3 years) will not happen in the future.
I'm also not impressed by LT record, DODGX had a great record years ago but now it trails the "stupid" index SPY for 10 years already

BTW, I used to be at 80-90% equities until several years prior to retirement where I change gradually to more bonds.

Crash

Money here in the USA is all green, no matter how you come by it. MWTRX has its adherents, and that is likely well deserved. The paltry monthly dividends have kept me out of this fund, ever since I went looking for bond funds to retire with. Mine: PRSNX RPSIX PTIAX.

wxman123

FD1000 said:

MWTRX is a good fund but GIBLX has a better record for 1-3-5 years.
Both are not funds I use since I'm mainly a bond investor in the last several years and their past performance (6% average for 3 years) will not happen in the future.
I'm also not impressed by LT record, DODGX had a great record years ago but now it trails the "stupid" index SPY for 10 years already

BTW, I used to be at 80-90% equities until several years prior to retirement where I change gradually to more bonds.

Can you please explain your comment? Are you saying that you won't buy a fund with good performance because it can't keep up? Not sure how you can be confident that a newer fund will outperform established winners. I have substantial positions in both MWTRX and GIBLX, a very big fan of the latter.

Sven

FD1K is a trader not an investor. Enough said.

FD1000

wxman123 said:

FD1000 said:

MWTRX is a good fund but GIBLX has a better record for 1-3-5 years.
Both are not funds I use since I'm mainly a bond investor in the last several years and their past performance (6% average for 3 years) will not happen in the future.
I'm also not impressed by LT record, DODGX had a great record years ago but now it trails the "stupid" index SPY for 10 years already

BTW, I used to be at 80-90% equities until several years prior to retirement where I change gradually to more bonds.

Can you please explain your comment? Are you saying that you won't buy a fund with good performance because it can't keep up? Not sure how you can be confident that a newer fund will outperform established winners. I have substantial positions in both MWTRX and GIBLX, a very big fan of the latter.

For the average Joe investor: KISS investing
1) I believe in using up to 5 (maybe 7) funds
2) The core portion should be about 70% and use very cheap indexes, the rest may be in managed funds that have something special.
3) Hardly trade which means looking at your portfolio 1-2 times annually and make small adjustments of 1-2 funds.

With that in mind:
1) Core: I would use SPY/VTI for most of my stocks. BIV as my generic bond fund.
Explore: PRWCX, VWIAX, PIMIX.
2) Let's check MWTRX and GIBLX in the last 5 years. I don't see MWTRX as anything more/special beyond BIV but GIBLX is different enough which is why I may use it in my explore portion. See 5 year chart.

My style isn't recommended to anybody.
1) I'm a flexible investor with specific goals. Making over 6% annually using mainly bond funds, be positive every year, SD < 3, never lose 3% from any last top.
2) I mainly hold very concentrated portfolio of 2-3 funds. I may own a fund, weeks or years. I held PIMIX for 6-7 years, PHMIX for 3 years, IOFIX easily over 50% in the last 3 years.
3) Even if I own a fund for years, I may sell it for days to several weeks when market conditions are extreme which is one of my goals. This is not your usual trader as someone who buys 10 stocks and keep changing them.

fred495

FD said: "With that in mind:
1) Core: I would use SPY/VTI for most of my stocks. BIV as my generic bond fund.
Explore: PRWCX, VWIAX, PIMIX."


Since PRWCX in your above "Explore" category is closed to new investors, and has been for many years, shouldn't you replace it with another comparable fund for those of us who are not current shareholders? May I suggest you look at VLAAX/VLAIX, for example, a balanced fund that has very similar risk/reward attributes. Of course, any other suggestions are welcome, too.

Fred

Crash

VLAAX looks damn good. I wanted to get my wife's old 403b into VLAAX as a T-IRA. I dealt with them directly, not through a broker like Fidelity, TDA, Schwab, etc. I highly recommend that you buy shares through an intermediary. Dealing directly with Value Line was Operation FUBAR.

FD1000

Crash, I never dealt directly with any company. The question is why would anyone invest directly instead of a discount broker?