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Lower-rated and illiquid nonagency MBS in IOFIX can bite again, and again. The fund firm also had to settle with the SEC on mispricing of odd-lot bonds and market manipulation related to thinly traded small bond issues. When a bond fund is forced to sell massively (see the chart below), it tries to sell its most liquid and better quality bonds first, and then what remain is a portfolio of declining quality with increasing risks. The leverage also goes up. While IOFIX may recover again, it isn't a fund for the faint-hearted.
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I also see that Tim Miner has departed Garrison Point. I was a big fan. Garret Smith, Brian Loo, and Jonathan Tran remain.
Just 2 years ago, IOFIX enjoyed more the $4B in AUM. Now, under $250M.
Painful to witness.
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IOFIX Flows and Return Data Since Inception (Absolute Scale)