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Ques: LCR vs LCORX (amount & type of short positioning each uses)
Looks like LCR (etf) doesn’t currently have any short equity positions, while LCORX has well north of 10% in short holdings. Overall equity exposure (when LCORX’s shorts are taken consideration) is similar. Both good funds. LCR is cheaper. Just wondering if I understand this right. Has LCR held shorts in the past?
You are correct. I neglected to look at the list of top holdings at M* where SPDN is listed. Don’t know why M* doesn’t display it as a short position in the overall portfolio depicted at top of page.
Yes - It’s all coming back to me now. Apparently LCR uses etfs while LCORX buys, sells, and shorts individual stocks. FWIW: I owned LCR briefly and than moved into LCORX a few months ago.
Other thoughts on these 2 funds and relative risks appreciated, At a blush, I’d probably think LCR a bit riskier. FWIW
Thanks @hank. Amazingly, the statistics for these 2 funds are so close over the past 4 years (shown below from portfolio visualizer). You wouldn't know one invested in stocks and the other in ETFs. I hold LCR now, just because it's easier to buy ETFs on dips. At least in my mind. I intend to work the fund up to 5% of my portfolio. Once I do, I may convert to LCORX, or not. Based on the numbers it probably doesn't matter much.
Interesting numbers on risk scenarios. A little surprising it can be calculated so precisely.
Being able to add / sell shares at will is an important consideration. It’s a bit disconcerting to know that adding to an open-end mutual fund locks that amount of $$ in for 60 days at Fido (unless you pay their fee). That said, it’s all “in the head” as you’d be free to sell all your previously purchased shares that meet the minimum hold time whenever you wanted. Just messes with my brain a little.
It probably is all in the head, @hank. Selling doesn't fit into my equation because I plan to have the fund as a buy and hold. It's just the fact I can put in a buy limit order for a lower price and if it gets there, great. I bought at a bargain. There isn't really any reason not to covert what I already hold in LCR to LCORX now. There's just no hurry.
This short term time frame is from October 26, 2023; when both many U.S. equity and bond sectors began to advance from a sleepy period.
This chart is fully 'live' for your future use. At the very top one may enter whatever valid ticker(s). Separate multiple tickers with a 'comma'. Do the 'enter' key thing. Now, at the page bottom one will see 200 days (which is default). Double click this number (it will highlight), then type in 135 days, do the 'enter' key again, to load the chart back to October 26, 2023. This number will have to be adjusted as the calendar moves forward, but is valid for use as of May 10, 2024. At the bottom left is also a 'red/green' icon. Select this for a bar chart and more easily readable 'total' returns. One may switch back to the link graph when 'selecting' the graphic icon.
NOTE: at the days icon, one may right click for a default drop down list of time frames. ALSO at the days area, one may double click the number there and enter any number of days to move backwards in 'calendar' start dates of your choice.
I think I have all of the easy steps in place. Let me know, otherwise.
Save this 'StockCharts' site page, for future use, in your favorites list.
Like @MikeM, I have initiated a position with LCR a year ago, and slowly building the position. Interesting that the short position has decreased since Professor Snowball’s write up in 2023. Today, it holds 4.07% in Direxion Daily S&P 500 Bear 1x Shares per @JD_co reporting.
Through the ups and downs in last two year, LCR has performed very well, especially in drawdowns. This aspect is important to us as we approach retirement. We particularly like the ETFs so that it can be readily purchased in major brokerages.
@catch22, thank for the chart. I use StockCharts frequently too.
@catch22 / Thanks for the comparison chart. My OP’s title wasn’t worded very well. Sounded like I was trying to decide which fund was better or running ahead of the other. That wasn’t it at all. What I was seeking was insight to the degree, if any, that each holds short equity positions (sells stocks short).
During the discussion it became clear M* doesn’t seem to understand that SPDN (1X short S&P 500) constitutes a short position and thus does not reflect this in its “portfolio” summary (top of page). Fortunately, as JD_co noted, it does list SPDN later on as among the fund’s top holdings. So readers can figure that out - if they realize SPDN is an inverse fund.
@Sven - Thanks for the insights. I wasn’t aware LCORX had lowered its short positioning since the Professor wrote of it. I had a sense they might have from Friday’s Bloomberg snippet I posted elsewhere in which one of LCORX’s managers is intoned (not quoted) to be bullish on the S&P thru year’s end.
As for fund performance, anything under 5 years would seem too soon to react to in terms of buying / selling. And, there are other factors besides past performance to take into account. As @MikeM mentioned, etfs are easier to trade.
Comments
You are correct. I neglected to look at the list of top holdings at M* where SPDN is listed. Don’t know why M* doesn’t display it as a short position in the overall portfolio depicted at top of page.
Yes - It’s all coming back to me now. Apparently LCR uses etfs while LCORX buys, sells, and shorts individual stocks. FWIW: I owned LCR briefly and than moved into LCORX a few months ago.
Other thoughts on these 2 funds and relative risks appreciated, At a blush, I’d probably think LCR a bit riskier. FWIW
ticker CAGR STD bestY worstY Sharpe Sortino
LCORX 7.34% 10.64% 15.2% -6.8% 0.52 0.78
LCR 7.23% 10.57% 13.8% -7.6% 0.51 0.79
Interesting numbers on risk scenarios. A little surprising it can be calculated so precisely.
Being able to add / sell shares at will is an important consideration. It’s a bit disconcerting to know that adding to an open-end mutual fund locks that amount of $$ in for 60 days at Fido (unless you pay their fee). That said, it’s all “in the head” as you’d be free to sell all your previously purchased shares that meet the minimum hold time whenever you wanted. Just messes with my brain a little.
I agree on the “in-the-head” part!
LCR vs LCORX This short term time frame is from October 26, 2023; when both many U.S. equity and bond sectors began to advance from a sleepy period.
This chart is fully 'live' for your future use. At the very top one may enter whatever valid ticker(s). Separate multiple tickers with a 'comma'. Do the 'enter' key thing. Now, at the page bottom one will see 200 days (which is default). Double click this number (it will highlight), then type in 135 days, do the 'enter' key again, to load the chart back to October 26, 2023. This number will have to be adjusted as the calendar moves forward, but is valid for use as of May 10, 2024. At the bottom left is also a 'red/green' icon. Select this for a bar chart and more easily readable 'total' returns. One may switch back to the link graph when 'selecting' the graphic icon.
NOTE: at the days icon, one may right click for a default drop down list of time frames. ALSO at the days area, one may double click the number there and enter any number of days to move backwards in 'calendar' start dates of your choice.
I think I have all of the easy steps in place. Let me know, otherwise.
Save this 'StockCharts' site page, for future use, in your favorites list.
Remain curious,
Catch
Through the ups and downs in last two year, LCR has performed very well, especially in drawdowns. This aspect is important to us as we approach retirement. We particularly like the ETFs so that it can be readily purchased in major brokerages.
@catch22, thank for the chart. I use StockCharts frequently too.
During the discussion it became clear M* doesn’t seem to understand that SPDN (1X short S&P 500) constitutes a short position and thus does not reflect this in its “portfolio” summary (top of page). Fortunately, as JD_co noted, it does list SPDN later on as among the fund’s top holdings. So readers can figure that out - if they realize SPDN is an inverse fund.
@Sven - Thanks for the insights. I wasn’t aware LCORX had lowered its short positioning since the Professor wrote of it. I had a sense they might have from Friday’s Bloomberg snippet I posted elsewhere in which one of LCORX’s managers is intoned (not quoted) to be bullish on the S&P thru year’s end.
As for fund performance, anything under 5 years would seem too soon to react to in terms of buying / selling. And, there are other factors besides past performance to take into account. As @MikeM mentioned, etfs are easier to trade.