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im thinking about selling BAMBX and buying fidelity money market fund SPAAX. as of 5/18/23 bambx is only up .11% while spaax is up 1.62%. this money is in a non retirement account. im looking for saftey of principle but i would also like to make a little return on my money. im not used to seeing this kind of a return on a money market fund and i dont know how long it can last.
Fido has several m-mkt funds. SPAXX is among core/settlement funds. But Fido has other higher yielding m-mkt funds with higher min & restrictions. Fido draws automatically from SPAXX first, & then from other Fido m-mkt funds.
I owned BAMBIX through most of 2022 (10% weighting). There’s a great thread on it somewhere in the 2021 or 2022 archives. Sold it to move into a more aggressive 40/60 conservative allocation fund after markets fell so much in ‘22. But I keep it in mind as a potential defensive holding. The manager (Jeff Rosenberg?) appears quite often on Bloomberg TV and certainly makes a good impression. I get the feeling BAMBX and some others in the league feel they can earn their pay if they deliver a percent or two better than MM / short-term bond funds - which I suspect they’ll manage to do over time. Yet, when you look at the ERs on them it makes you shake your head.
As msf posted a while ago, ML also offers Fidelity mm funds >4.6% (at the moment).
No sweep functions (meaning it takes a little planning to move your moneys about), but otherwise a fine thing to use and quite a departure from the past.
In related news, my BoA heloc is now >7.4%, unbelievably, which is slightly higher than my first house mortgage, 51y ago.
Anybody care to speculate on what caused BAMBX to fall to earth after several great years? From 2016 through 2021 it was positive every year - delivering (by my estimate) around 5% yearly returns on average. That type performance from a low / moderate risk fund is going to attract eyeballs. But it fell 3% in 2022 and is dead-even (0%) YTD.
OK - 2022 was reasonable considering the whacking both equities and fixed income received, But this year makes no sense. All I can figure is that it’s invested heavily at the short end of the yield curve and has struggled against sharply rising short term rates. If that’s the case, it stands to do much better when short-term rates begin falling. Just a guess. Anybody see anything different?
“Black box” is probably a misnomer. Yet, ISTM this type of investment process makes it a real challenge to “get under the hood” and really understand what makes the fund behave the way it does.
@hank said, "Anybody care to speculate on what caused BAMBX to fall to earth after several great years?"
I feel your pain...
I am trying to figure out the same with a somewhat similar holding of mine, PTIAX. It has recently had a "slight recovery" from that fall, but it has a long ways to go. PTIAX recently tumbled much further than BAMBX. I am assuming due to its pure bond makeup. BAMBX holds about10% in equities. I was not prepared to stomach a 12% loss (2022) in a fund that I selected as a cash alternative.
Comments
No sweep functions (meaning it takes a little planning to move your moneys about), but otherwise a fine thing to use and quite a departure from the past.
In related news, my BoA heloc is now >7.4%, unbelievably, which is slightly higher than my first house mortgage, 51y ago.
OK - 2022 was reasonable considering the whacking both equities and fixed income received, But this year makes no sense. All I can figure is that it’s invested heavily at the short end of the yield curve and has struggled against sharply rising short term rates. If that’s the case, it stands to do much better when short-term rates begin falling. Just a guess. Anybody see anything different?
“Black box” is probably a misnomer. Yet, ISTM this type of investment process makes it a real challenge to “get under the hood” and really understand what makes the fund behave the way it does.
"Anybody care to speculate on what caused BAMBX to fall to earth after several great years?"
I feel your pain...
I am trying to figure out the same with a somewhat similar holding of mine, PTIAX. It has recently had a "slight recovery" from that fall, but it has a long ways to go. PTIAX recently tumbled much further than BAMBX. I am assuming due to its pure bond makeup. BAMBX holds about10% in equities. I was not prepared to stomach a 12% loss (2022) in a fund that I selected as a cash alternative.
BAMBX Compared to PTIAX
I’ll peek at PTIAX after closing out this comment. i’m curious what the ER might be and whether performance justifies it.