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The expenses present a problem for me - but they’re not uncommonly high for these hedge like funds. I still have a modest hold on it, having sold about half late last year. I don’t stay awake at night worrying about this one. But, I’m guessing TRP has it parked conservatively while expecting some dramatic change in the markets. And, I’ve found TRP’s macro calls generally correct. Also, note they benchmark this one against 90-day T Bills. Talk about picking a “straw-man” benchmark!
It would be fun tracking fund flows on this one, and a few others. As retail investors we have notoriously poor timing skills. Anybody have a link to a site that tracks recent fund flows by individual funds? Thanks in advance. Also - Is there an etf that buys the funds being most sold by retail investors? (a contrary bet)
The fund is off 1.29% YTD. If they’re having to unload assets due to heavy redemptions it would explain part of it.
But what an odd week it has been. Enough to throw any money manager’s barometer into dysfunction. Suddenly we’ve awakened to inflation. Really? So rates on the 10-year are almost back to where they topped-out last March. Back than there wasn’t the hysteria that seems to have accompanied this week’s bump-up in rates. The Fed speaks? Does anyone listen? You can’t invest based on what they say because they can change course on a dime if, in their words, “the current data suggests …”
Talk about cross-currents … Industrial metals are on a tear this week. Rio Tinto (RIO) is having the best week since I bought it several months ago. But, gold - a typical inflation hedge - has seen two of its worst days in recent memory, dropping more than $35 on 2 days this week and dragging down miners. Wheaton Precious Metals (WPM) has experienced its worst week since I bought it several months ago. Than there’s the tornado that has ripped through the ARKK-type funds - affecting other market sectors. Maybe one of those yellow highway caution signs needs to be displayed: “Caution! Short Sellers at work”
Sorry if this is too far off topic. But I think these are the type of questions to think about when buying or owning a “multi-asset” fund. Or, do we just buy whatever has the best 3 year track record?
I’m impressed if you already have your weekend Barron’s. Mine on Kindle comes in Saturdays - usually in the late morning.
Positive stories in B do cause stocks to spike. Generally the industrial metals were hot this week. Bloomberg reported today that NGLOY - one I held for a while - was on fire today (figuratively).
Back to TMSRX - Suspect they have some precious metals miners in the mix. Seems to me a lot of hedge fund managers like to hold a bit. Might help explain its woes this week.
I don't have weekend Barron's yet. But I start looking for stories on Friday that may make weekend Barron's and this one is already filed under European Trader. On PC, I get online version of the weekend issue typically by Friday 9pm. That is why I am able to report my Part 1 summaries to my readers early on Saturday.
Sold TMSRX in 2021 with some small profits. I did the same thing with ACVVX QMNNX PAUAX MFLDX years ago. ADANX is on my watch list and I may reduce my holdings in that one. Once they start declining I'm gone, because I don't have confidence that these funds work in every market. There's enough funds like BAMBX CVSIX ARBOX VARAX that continue to work for me. I probably should just simplify and go with funds like VWINX AONIX EXDAX FIKFX .
I have some reluctance to invest in multi-asset funds or some x-y-z strategic funds. I view my portfolio as a multi asset personal strategic fund in itself. My first objection is I don’t want find someone else’s strategy turning around and working cross- current to what I want. Next I want to invest in assets not ideas. I view assets as stocks, bonds, land, gold, and cash. Common stocks are bought in companies I think will make me some money. Right now it’s housing, water, and infrastructure. Bonds are more a low volitility decision rather a money making try. Intermediate government bond have a historically negative correlation with equities. Not a positive return this year for IG ,but APOIX gave a 6% return in 2021. I buy gold because it’s not stocks or bonds and because the pharaohs valued it and we hoard it at Fort Knox. Despite all the talking it down, it seems to have some staying power. I doubt bitcoin will dethrone it. Land is not REITS. A reit fund is a equity fund of companies the manager is confident will pay their rent or mortgage. And cash is spending money, some that’s for now kept in money markets, some that’s for later kept in a mutual fund I think has low volatility. There is a lot, I mean a lot, of discussion about alternative and allocation funds. All of which I read but in the end I like my way more. Mom and the nuns always called me stubborn. John
Off another .72% today. That puts its year-over-year loss at 8%. Anybody know what’s going on at TRP? Maybe somebody should call them? I thought this was supposed to be a “defensive” fund.
I’ve been a defender of this fund in the past. The published benchmark is the 90 day T-Bill (yielding maybe …0.10%?) Pretty minimal expectation. It shouldn’t require this amount of volatility to achieve that meager goal. In the back of my mind, it’s the 5-manager setup that’s partially to blame. Perhaps there’s little coordination among the competing members? And (just a guess) they’re probably relatively inexperienced people.
At one time TMSRX was my single largest holding - comprising somewhere in the low double-digits percentage-wise. I’ve already moved about half of the earlier stake to BAMBX. But, I’m sure if I sell the rest it’ll pop 10% in short order.
>> the 5-manager setup that’s partially to blame. Perhaps there’s little coordination among the competing members? And (just a guess) they’re probably relatively inexperienced people.
You really think these are plausible conditions in a shop like TRP?
15y and 16y at TRP. One a division director of research. "Just a guess." Not finding the other three managers. M* also lists 2 guys.
... highly flexible investment approach in an effort to provide strong risk-adjusted returns, pursue positive returns through various market environments, and maintain low overall volatility. The fund has broad discretion in seeking investments and utilizes a wide range of strategies ...
Highly flexible with broad discretion. Lots bonds and cash (~89%) w stock tweaking, at a glance, which evidently accounts for the benchmark.
Wacko Equity / FI year-end holdings lists, w problematic headers and categorizations.
>> Maybe somebody should call them?
Sure, go for it; they can declaim the webpage subsections over the phone.
“The strategies currently available to the managers include Macro and Absolute Return; Fixed Income Absolute Return; Equity Research Long/Short; Quantitative Equity Long/Short; Volatility Relative Value; Style Premia; Dynamic Global FX; Dynamic Credit; and Global Stock. Mr. Hubrich explains that “there is a spectrum, where on one end you have strategies (like Style Premia) that are ‘born’ as absolute return strategies and require no additional hedging at all, while on the other end you have strategies (like global stock) where a traditional long-only investment is paired with an explicit, meaningful hedge.” While the constellation of strategies included in the portfolio changes with evolving market conditions, the goal remains to provide an absolute return portfolio throughout.”
I’ve been under the (possibly mistaken) impression that each strategy had / has its own management team doing research, analysis and making decisions. From the quoted passage by Dr. Snowball it appears the 2 managers may be attempting to implement the 5-7 different investment strategies. (No wonder they’re having problems.) I did attempt to phone them twice. Both times resulted hold times in excess of 20 minutes after which I gave up.
Since I’m in the process of selling this fund, I’ll leave it to those who remain behind to continue the thread. No point in beating a dead horse.
DS: The purpose of MSTR [[ in-house synonym: 'MSTR seeks to invest in “non-market sources of return,” that is, returns that can be delivered whether the market rises or not. That’s possible by choosing investments that are intrinsically uncorrelated ... ' ]] is to diversify your portfolio, not be your portfolio. Many investors overdiversify, adding one stock (or bond) fund after another with each new addition adding less and less to the robustness of the entire portfolio. At base, investors just add more exposure to the same sets of risks and the same return drivers. MSTR diversifies by tapping into other sources of alpha which is reflected in its relatively low correlation to the S&P 500 (0.58), very low correlation to the bond market (0.16), and low downside capture ratio (0.12) against the S&P 500.
Investors looking for a way out of high levels of volatility and inconsistent returns should add T. Rowe Price Multi-Strategy Total Return to their due-diligence list, just as many investment professionals at Price itself seem to have done.
By way of full disclosure: I reallocated a substantial fraction of my retirement investments to TMSRX in May 2020 and disclosed that allocation in our June 2020 issue.
Hi @hank Thanks for this note. I'm attempting to envision a "decision making" meeting with the criteria put forth. Kinda like going to the store for the 6 items one needs to make a very nice 5 quart pot of chili and buying 12 items, hoping the chili will be better this time.
“The strategies currently available to the managers include Macro and Absolute Return; Fixed Income Absolute Return; Equity Research Long/Short; Quantitative Equity Long/Short; Volatility Relative Value; Style Premia; Dynamic Global FX; Dynamic Credit; and Global Stock. Mr. Hubrich explains that “there is a spectrum, where on one end you have strategies (like Style Premia) that are ‘born’ as absolute return strategies and require no additional hedging at all, while on the other end you have strategies (like global stock) where a traditional long-only investment is paired with an explicit, meaningful hedge.” While the constellation of strategies included in the portfolio changes with evolving market conditions, the goal remains to provide an absolute return portfolio throughout.”
Basically - Because I can. After over 30 years with most assets held directly at TRP, I moved to a full service brokerage last summer. Now I have dozens of “alternative” type funds from which to select. Some have better track records than TMSRX. Some have lower fees. Some have easier to comprehend strategies. And some are ETFs which are a bit less expensive and easier to buy and sell.
@hank, Looks like TMSRX popped today. The first up day in a month(?) Hmm, what changed?
Seriously, there may be better alt funds than TMSRX, but I'm not all that dissatisfied YTD. I hold a few alternative funds as a hedge against equity holdings, in lieu of bonds actually, and in that perspective TMSRX is doing well as measured by the S&P 500.
One alternative fund I bought last fall in my 401k was REMIX. I had a rude awaking with it in November through January, but since it's January low it's up ~11%. More roller-coaster than I like but I'll give it a year or so to play out.
Comments
It would be fun tracking fund flows on this one, and a few others. As retail investors we have notoriously poor timing skills. Anybody have a link to a site that tracks recent fund flows by individual funds? Thanks in advance. Also - Is there an etf that buys the funds being most sold by retail investors? (a contrary bet)
https://www.morningstar.com/funds/xnas/tmsrx/quote
But what an odd week it has been. Enough to throw any money manager’s barometer into dysfunction. Suddenly we’ve awakened to inflation. Really? So rates on the 10-year are almost back to where they topped-out last March. Back than there wasn’t the hysteria that seems to have accompanied this week’s bump-up in rates. The Fed speaks? Does anyone listen? You can’t invest based on what they say because they can change course on a dime if, in their words, “the current data suggests …”
Talk about cross-currents … Industrial metals are on a tear this week. Rio Tinto (RIO) is having the best week since I bought it several months ago. But, gold - a typical inflation hedge - has seen two of its worst days in recent memory, dropping more than $35 on 2 days this week and dragging down miners. Wheaton Precious Metals (WPM) has experienced its worst week since I bought it several months ago. Than there’s the tornado that has ripped through the ARKK-type funds - affecting other market sectors. Maybe one of those yellow highway caution signs needs to be displayed: “Caution! Short Sellers at work”
Sorry if this is too far off topic. But I think these are the type of questions to think about when buying or owning a “multi-asset” fund. Or, do we just buy whatever has the best 3 year track record?
https://www.barrons.com/articles/rio-tinto-stock-lithium-green-energy-51641507428?refsec=europe
Positive stories in B do cause stocks to spike. Generally the industrial metals were hot this week. Bloomberg reported today that NGLOY - one I held for a while - was on fire today (figuratively).
Back to TMSRX - Suspect they have some precious metals miners in the mix. Seems to me a lot of hedge fund managers like to hold a bit. Might help explain its woes this week.
Chart TMSRX from Lipper
FYI, co-manager Mark Saylor left the fund in October. Apparently, the fund is only available directly from Penn Mutual.
Fred
John
Off another .72% today. That puts its year-over-year loss at 8%. Anybody know what’s going on at TRP? Maybe somebody should call them? I thought this was supposed to be a “defensive” fund.
I’ve been a defender of this fund in the past. The published benchmark is the 90 day T-Bill (yielding maybe …0.10%?) Pretty minimal expectation. It shouldn’t require this amount of volatility to achieve that meager goal. In the back of my mind, it’s the 5-manager setup that’s partially to blame. Perhaps there’s little coordination among the competing members? And (just a guess) they’re probably relatively inexperienced people.
At one time TMSRX was my single largest holding - comprising somewhere in the low double-digits percentage-wise. I’ve already moved about half of the earlier stake to BAMBX. But, I’m sure if I sell the rest it’ll pop 10% in short order.
You really think these are plausible conditions in a shop like TRP?
But are we looking at the same fund?
https://www.troweprice.com/financial-intermediary/us/en/investments/mutual-funds/us-products/multi-strategy-total-return-fund.html
15y and 16y at TRP. One a division director of research. "Just a guess." Not finding the other three managers. M* also lists 2 guys.
... highly flexible investment approach in an effort to provide strong risk-adjusted returns, pursue positive returns through various market environments, and maintain low overall volatility. The fund has broad discretion in seeking investments and utilizes a wide range of strategies ...
Highly flexible with broad discretion. Lots bonds and cash (~89%) w stock tweaking, at a glance, which evidently accounts for the benchmark.
Wacko Equity / FI year-end holdings lists, w problematic headers and categorizations.
>> Maybe somebody should call them?
Sure, go for it; they can declaim the webpage subsections over the phone.
https://www.mutualfundobserver.com/2020/07/t-rowe-price-multi-strategy-total-return-tmsrx/
I’ve been under the (possibly mistaken) impression that each strategy had / has its own management team doing research, analysis and making decisions. From the quoted passage by Dr. Snowball it appears the 2 managers may be attempting to implement the 5-7 different investment strategies. (No wonder they’re having problems.) I did attempt to phone them twice. Both times resulted hold times in excess of 20 minutes after which I gave up.
Since I’m in the process of selling this fund, I’ll leave it to those who remain behind to continue the thread. No point in beating a dead horse.
That DS link is over a year and a half old, although he too lists the two managers only.
Suggest going to the TRP source.
Why are you selling? Its 3y return is 'comparable'. It is kinda expensive.
https://www.marketwatch.com/investing/fund/tmsrx
The purpose of MSTR [[ in-house synonym: 'MSTR seeks to invest in “non-market sources of return,” that is, returns that can be delivered whether the market rises or not. That’s possible by choosing investments that are intrinsically uncorrelated ... ' ]] is to diversify your portfolio, not be your portfolio. Many investors overdiversify, adding one stock (or bond) fund after another with each new addition adding less and less to the robustness of the entire portfolio. At base, investors just add more exposure to the same sets of risks and the same return drivers. MSTR diversifies by tapping into other sources of alpha which is reflected in its relatively low correlation to the S&P 500 (0.58), very low correlation to the bond market (0.16), and low downside capture ratio (0.12) against the S&P 500.
Investors looking for a way out of high levels of volatility and inconsistent returns should add T. Rowe Price Multi-Strategy Total Return to their due-diligence list, just as many investment professionals at Price itself seem to have done.
By way of full disclosure: I reallocated a substantial fraction of my retirement investments to TMSRX in May 2020 and disclosed that allocation in our June 2020 issue.
underlining added
Wonder if DS has bailed too.
Thanks for this note. I'm attempting to envision a "decision making" meeting with the criteria put forth.
Kinda like going to the store for the 6 items one needs to make a very nice 5 quart pot of chili and buying 12 items, hoping the chili will be better this time. Remain curious,
Catch
Basically - Because I can. After over 30 years with most assets held directly at TRP, I moved to a full service brokerage last summer. Now I have dozens of “alternative” type funds from which to select. Some have better track records than TMSRX. Some have lower fees. Some have easier to comprehend strategies. And some are ETFs which are a bit less expensive and easier to buy and sell.
Thank you, Derf
Go for it @Derf. Wouldn’t be first time I stubbed my toe badly.
Seriously, there may be better alt funds than TMSRX, but I'm not all that dissatisfied YTD. I hold a few alternative funds as a hedge against equity holdings, in lieu of bonds actually, and in that perspective TMSRX is doing well as measured by the S&P 500.
One alternative fund I bought last fall in my 401k was REMIX. I had a rude awaking with it in November through January, but since it's January low it's up ~11%. More roller-coaster than I like but I'll give it a year or so to play out.
https://mutualfundobserver.com/2020/09/alternative-and-global-funds-during-a-global-recession/#more-14509