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Time to sell TMSRX

As of 11/24 I see my holdings ($) went south, (down a few bucks). I'll give it a little more time before pulling the trigger !

Enjoy your meal, Derf


  • edited November 2021
    That’s a personal decision. For some it would be the right one.

    A cold night in hell before I sell. Noticed early on that the fund often remains flat or rises on days when equities falter. So for me it balances out the load in an increasingly defensive age-appropriate portfolio. In less than 4 years of existence it’s achieved 4+% annual. That’s better than a lot of short and intermediate term bond funds and hands-down better than cash. But all of us, I think, had hoped for more.

    If it’s more of a “dog” recently I hadn’t noticed. But that would likely be due to exposure to gold and other non-dollar assets along with domestic bonds. All of these have suffered of late. With gold it’s probably temporary. With bonds I fear it’s terminal.

    My bias … I’ve owned TRP funds for around 30 years and believe them very good at making wise allocation decisions and strong macro-reads. However, those macro-calls are often early. I suspect a saying going around in their inner circle might be: “Investors can remain irrational longer than defensive funds can remain in existence.” Since they’ve added a slug of it to a number of their allocation and target date funds, TMSRX’s existence is probably not threatened. Many here may own it without realizing it.

    FWIW - I recently unloaded 25% of PRPFX after remaining hands-off for a decade. Had grown to too large a position in the portfolio. Plus - sounds from a recent Barron’s piece (posted here) that Cuggino is beginning to toy around with the allocation more than usual - adding more equities. That will make the fund riskier than in the past. And might help answer a question @bee raised several months ago - “What’s driving PRPFX?”. Harry Browne must be tossing in his slumber.

    Like I said at the onset - For less risk averse investors TMSRX is probably one to sell. But recognize you’re sacrificing some downside protection.
  • edited November 2021
    I could just repeat what I said in a nearby thread on BAMBX (LINK).

    These multi-strategy funds (ALL alternatives; a formal M* Category under Alternatives) should NOT to be confused with multi-asset funds discussed elsewhere (SOME alternatives; not a formal M* Category).

    M* Multistrategy Definition
    Multistrategy portfolios offer investors exposure to two or more alternative investment strategies, as
    defined by Morningstar’s alternative category classifications, through either a single-manager or multimanager approach. Funds in this category typically have a majority of their assets exposed to alternative
    strategies, but at a minimum, alternatives must comprise greater than 30% of the strategy’s gross
    exposure. The category includes funds with static allocations to alternative strategies as well as those
    that tactically adjust their exposure to different alternative strategies and asset classes. Multistrategy
    funds typically aim to have low to modest sensitivity to traditional market indexes, although that may not
    be the case for strategies with lower alternatives allocations.
  • @Derf, enjoy your turkey dinner and side of football today - Go Bills!

    To your post, I'm re-reading the funds strategy and it hasn't changed. The strategy and the fact it comes from TRP ( my bias also like hank said) is why I will hold it long term. Lets measure it over a complete market cycle.

    Right or wrong, for me it replaced bond funds in my self managed portfolio. I sold them all during the year. I haven't looked extensively, but I believe this fund has outperformed most intermediate-core bond funds over the past year and I suspect that trend will follow as rates increase. I have a group of 3 multi-strategy/alternative funds, TMSRX is substantially the largest holding of the 3. The other 2 are CTFAX and JHQAX. The latter has been a great addition FWIW.
    Fund Strategy
    The investment seeks strong long-term risk adjusted returns. The fund uses a highly flexible investment approach in an effort to provide attractive returns, relative to the returns on cash, that are uncorrelated to moves in the broader equity and fixed income markets through various market environments, as well as to maintain low overall volatility.
  • I could just repeat what I said in a nearby thread on BAMBX (LINK).

    Tips on linking:

    One can link to a specific post by copying the link from the date on that post; your post is:

    When quoting material, a link to the source can provide additional context. The M* definition may have come from Morningstar, Morningstar Category for Funds Definitions (May 6, 2021), p. 34.

    As to what it means to be an alternative strategy fund, M* changed this about a half year ago. At that time, it removed long-short funds from the alternative strategy group, because these funds are largely influenced by the equity market. But M* kept market neutral funds (a special case of long-short, where long = short) as alternative funds. The reasoning being that these funds have diversified away the equity nature of their risk.

    That seems to be M*'s current take on alternative funds. That regardless of what they hold they diversify away the intrinsic nature of their holdings. So, if a fund uses multiple alternative strategies, it is now called a multistrategy fund. But if a fund uses multiple strategies that are not alternative strategies, it is not. Well, it's still a multistrategy fund, but it's not a multistrategy category fund.

    Are we confused yet? I certainly am, and following the maxim to never invest in something one doesn't understand, I tend to avoid alternative strategy funds, whether singular or multiple. YMMV.

    Fidelity has a slew of target retirement funds with lower volatility, higher Sharpe ratios, and better YTD, 1, and 3 year returns, including FFFAX (actively managed), FIKFX (index funds), FHBZX (both actively and passively managed funds), FIRMX, and FIRNX. Along somewhat the same lines is Vanguard's VASIX.

    These funds correlate somewhat more closely than TMSRX to the stock and bond markets, but if you're primarily looking for bond alternatives (better than cash and not too volatile) they seem to be good, less complicated candidates.
    Portfolio Visualizer correlation matrix

    A cursory look at the quarterly performance breakdown suggests that TMSRX may do better in periods of high market volatility, but that doesn't seem to help improve its long term volatility or its longer term performance.
  • @msf, thanks for the linking tip. Some of this site's features are not intuitive or are hidden.

    I should have thought of clicking on post date for link to a post - a FB like trick.

    Threads here open to the "latest" post by default and I figured out that removing "latest" in the URL opens them at the beginning.

    I also see moderator(s) exercising "allow falling" (or, prevent bumpup on new posts) for some threads but the action is not visible on threads.

    Good thing is that post Edit window is long (forever?). Most sites limit that to 24 hrs.

    I have cited from that M* document so many times that I stopped linking to it. But this is a newer site for me and has newer friends, so I will keep that tip in mind.
  • edited November 2021
    “(TMSRX) primarily seeks exposure to the following strategies, relying on both fundamental and quantitative research, although additional strategies may be employed at any time …

    Macro and Absolute Return;

    Fixed Income Absolute Return;

    Equity Research Long/Short;

    Quantitative Equity Long/Short;

    Volatility Relative Value;

    Style Premia.

    (Tools, methods, investments include) “… international and fixed income investing, short sales, derivatives, options, swaps, forward and futures contracts, leverage, and non-diversification risks, which may result in greater price fluctuation than the overall stock market.”
    (From T. Rowe Price)

    Here’s a link to an Article about alternative investing.

    I agree with @msf that the classification of “alternative” funds is confusing and sometimes inconsistent. I wish they’d stop trying. To me an alternative is a fund or other asset that is uncorrelated (in varying degrees) with stocks or bonds. Beyond that, I select the assets to fit the alternative part of my portfolio. Currently I use TMSRX, PRPFX and ABRZX to perform that function. #1 and #3 are probably pretty standard choices. #2 isn't a typical choice for inclusion in alternatives. And, at times when it served my purposes, I’ve plugged PRPFX into the balanced corner of the portfolio. The designation of components into portfolio sleeves is to serve the needs of the investor designing the portfolio. Do not be a slave to the machinations of M* or some other source who knows nothing about your risk tolerance, portfolio composition, investment purpose or your own macro view of the investment world.

    If you enjoy investing and track funds closely you will arrive over time at an understanding of how your specific investments behave under varying circumstances and the role in the portfolio you want to assign them. If you don’t enjoy the pursuit, than a simple target date or other allocation fund should do nicely.

    I’m not wedded to TMSRX. Most of these pseudo hedge-funds have serious drawbacks - high fees among them. And since their purpose is primarily to “hedge” equity risk, don’t expect them to keep up with equities. When looking at fees keep in mind that the strategies employed - especially short sales - are much more expensive to implement than simply investing in a plain vanilla equity or bond fund.
  • TMSRX has lower ytd 1 month and 3 month returns than PSCAX VARAX CVSIX GPANX .funds I own or follow.
  • Placed orders for FAAAX and GMAMX ,two funds that have minimum investment below $2500 at Fidelity .
  • carew388 said:

    Placed orders for FAAAX and GMAMX ,two funds that have minimum investment below $2500 at Fidelity .

    @carew388 - Happy sailing! :)

    (Might be some rough water tomorrow)

  • +1 maybe my orders will be filled at a lower nav tomorrow night.
  • edited November 2021
    New Covid variant detected in S. Africa, so futures are down. US stock exchanges close early (1PM ET) tomorrow.

    I sold my TMSRX a while back. I think there is such a thing as "momentum" with some of these mutual funds - as if they suddenly lose their mojo, and you don't know if/when it will come back.
  • Yes-my experience with too many alternative funds-they work until they don't !
  • i have been looking at tmsrx ever since david wrote a glowing article about it. but i never fully understood it. so i never bought it.
  • ducrow said:

    i have been looking at tmsrx ever since david wrote a glowing article about it. but i never fully understood it. so i never bought it.

    Haha, me too!

  • edited November 2021
    One of my go-to sites, MaxFunds, scores TMSRX somewhat favorably, giving it the lowest possible risk assessment of 1. Yet, curiously, it grades the fund as one of the worst (5) on its “Hot Money Index.” Pray tell me why a lame low volatility fund like this would be seeing huge investor flows in and out?

    Overall assessment = “Good” (73/100)
  • Markets down at the start, so will see how TMSRX fairs !
  • beebee
    edited November 2021
    @hank, thanks for the link to MaxFunds. There seems to be some inconsisitency. The site reports POAGX as a long time wiiner with an 86/100

    But when you click on the link it reports the fund as "Poor", linked here:
  • edited November 2021
    @bee - Do you have a link to that 86 score? I’m just getting the 50. Wonder if that’s for maybe two different time periods?

    Seems to me algorithms do most of the work at that site rather than Ol’ Max Ferris himself. Autopilot likely. I get some odd results too, but nothing as bizarre as the discrepancy you note. MaxFunds seems to overweight fees in assessing total score. So, possibly the lower rating is factoring in some type of front load and the higher rating not?

    @Derf - Timely post you put up there. A week of this type of markets and folks will be asking: “Is it time to buy TMSRX?”
  • @hank said,
    Do you have a link to that 86 score? I’m just getting the 50. Wonder if that’s for maybe two different time periods?
    Third down from top of list:
  • edited November 2021
    @bee - Thanks.

    Obviously something is screwed up there. Note that for 1 year the fund ranks 25th among its peer group, while for 3 years it ranks much better - 7th. So I’ll guess they haven’t updated their numbers on the chart you pasted to reflect the current year’s lackluster performance.

    However, if the fund’s potential “worst case” downside really is 65% as they claim, I’d suggest not buying it. Such a disastrous year would leave only 35% of the fund’ value remaining. Seems to me like you’d have to earn nearly 200% on that meager sum to get back to break-even the following year.

    Added - I didn’t intend to recommend Ferris’ site. It’s just one of several I click on from time to time for a wide variety of views. Morningstar and Lipper are also helpful for broad overviews. For specific fund holdings and year-to year-performance it’s hard to top Yahoo. I buy very few new funds. Usually put candidates on a watch list and monitor for at least a few months before buying. MaxFunds seems to be the most critical in its assessments - for whatever reason.
  • POAGX is closed to new investors for several years. Count yourself lucky if you already an investor. The other two PRIMECAP funds, Odyssey Growth Fund, POGRX and Odyssey Stock fund, POSKX are still open.
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