BAMBX’s current positioning?

hank

This is one segment of my alternative sleeve. Not disappointed in it, but considering shifting the $$ over time into more aggressive funds with the equity markets down so much this year.

Yahoo’s “holdings” added up to only about 30% with no explanation of what the other 70% was. So I found the list below at Fidelity. At least it appears to add up to 100% - but not very illuminating. Fido lists two rows of numbers. The row on the right side is shaded. I’m guessing that represents the average weighing within its peer class. Have added slash marks between rows for clarity.

For those who have followed the fund longer than I have, is the reported cash / bond exposure likely a temporary defensive position, or is this by and large a hedged income fund? What % exposure to equities or real assets (metals, real estate, etc.) would you expect this fund to maintain over longer periods?


BAMBX - Portfolio Weight (Multistrategy)

Cash & Equivalents 41.05% / 32.30%
0

Agency Mortgage-Backed 31.00% / 10.66%
0

Corporate Bond 24.60% / 13.89%
0

Convertible 1.91% / 3.42%
0

Asset-Backed 1.29% / 2.99%
0

Government 0.14% / 5.84%
0

Government Related0.01% / 26.71%
0

Bank Loan 0.00% / 1.33%
0

Commercial Mortgage-Backed 0.00% / 0.13%
0

Covered Bond 0.00% / 0.03%
0

Future/Forward 0.00% / 1.88%
0

Municipal Tax-Exempt 0.00% / 0.12%
0

Municipal Taxable 0.00% / 0.00%
0

Non-Agency Residential Mortgage-Backed 0.00% / 0.38%
0

Option/Warrant 0.00% / 0.02%
0

Preferred Stock 0.00% / 0.28%
0

Swap 0.00 / 0.01
0




LINK to BAMBX @ Fidelity https://fundresearch.fidelity.com/mutual-funds/composition/09260C109?type=sq-NavBar

yogibearbull

A quick look: BAMBX cash levels reported by Yahoo, M*, Fido seem high but BlackRock doesn't report much cash. Discrepancy may be due to its nature - M* says that 50% of the portfolio is long and the rest market-neutral or long-short. So, that may be cash related to shorts, not cash allocation.

LewisBraham

It's often hard to tell what many alt funds' true risk exposures are because of their derivatives usage so that a relatively tiny position asset wise in a stock futures or options contract can have a dramatic impact on returns. I would recommend going directly to the fund's web site and reading its specific literature to understand better than Yahoo or some other fund tracker site:
https://blackrock.com/us/individual/literature/fact-sheet/bambx-systematic-multi-strategy-fund-factsheet-us09260c1099-us-en-individual.pdf

https://blackrock.com/us/individual/literature/product-commentary/oef-systematic-multi-strategy-fund-qtd-commentary.pdf

https://blackrock.com/us/individual/resources/regulatory-documents/stream-document?stream=reg&product=BR-SMS-AG&shareClass=Class+A&documentId=1699980%7E1699979%7E1704311%7E1865166%7E1912777&iframeUrlOverride=%2Fus%2Findividual%2Fliterature%2Fsemi-annual-report%2Fsar-retail-fixed-income-two-06-30.pdf

Also: https://barrons.com/articles/a-2-9b-alternative-fund-that-actually-works-51606264740

My understanding is BAMBX will generally be at least 50% invested in high quality bonds while the remainder will be split between a long-short equity strategy and a macro one that makes country bets.

hank

Thanks. I’m familiar with Louis’ excellent Barron’s piece on the fund. Perhaps I should have pulled it up again before posting.

I’ll look over what Blackrock publishes in regard to holdings. Just looking at past performance tells me it’s a pretty conservative approach whatever they’re doing. Most ALT funds have some “black box” characteristics (trying to be polite here). Not a bad fund. Just trying to drill down a little more.

yogibearbull

@hank, this is the Barron's 11/30/20 piece on BAMBX,
https://www.barrons.com/articles/a-2-9b-alternative-fund-that-actually-works-51606264740?mod=past_editions

hank

Here’s a very thorough discussion of BAMBX from last November:

https://www.mutualfundobserver.com/discuss/discussion/58920/blackrock-systematic-multi-strategy-fund-bambx

In it fred495 provided a direct link to LB’s Barron’s piece. It works whether you are a subscriber or not. I appreciated that. Reading Barron’s via an Amazon Kindle subscription does not allow me to access Barron’s website directly. So links to past articles don’t get me in the door. Fred’s link did work, however.

Good article. The managers appear competent at what they do. They are bent on preserving capital - a worthy goal. What I’m trying to determine is the fund’s most recent weighting in long equity positions. Certainly behaves a lot more like a fixed income fund than a balanced, allocation or LS sort.



Addendum

Thanks Yogi & Lewis for your input. After more research I intend to keep BAMBX. It represents a small portion (around 15%) of a broader 45% allocation to Alternatives. It’s also the most conservative holding in that mix. To be down only 4-5% in a year when many intermediate bond funds have lost 10% or more is a tribute to the fund. It has dawned on me that there are other avenues I can pursue to ramp up risk exposure which involve buying or selling stocks or ETFs rather than mutual funds. I’m learning after a year with Fido that, when possible, it’s better not to make changes in NTF fund holdings as their 60-day holding period can come back to “bite” you at a later date.

Regards

FD1000

Check out FARIX much better performance(3 times in the last 3 years) with similar SD.
See (PV)

LewisBraham

FARIX seems like an interesting fund, but it has a $1 million minimum investment.

FD1000

LewisBraham said:

FARIX seems like an interesting fund, but it has a $1 million minimum investment.

All you got to do is check it out. Fidelity and Schwab have only $2500 min.

LewisBraham

Good to know.

hank

Thanks FD. Yes $2500 min at Fido. And one more “fund performance site” to add to my collection and further mess with my brain.

yogibearbull

FARIX also TF with $2,500 min at Schwab.
https://www.schwab.com/research/mutual-funds/quotes/fees/farix

FD1000

hank said:

Thanks FD. Yes $2500 min at Fido. And one more “fund performance site” to add to my collection and further mess with my brain.

I decided years ago to stop using ALT funds. They are not reliable and inconsistent. I developed my own timing system(link) that worked very well for me. I started practicing it in 2013.

hank

Sounds like a plan …