Came across MPV (Barings Participation Investors) and MCI (Barings Corporate Investors) on the Great Owl List.
I've been thinking of adding to my bond positions and was a bit surprised when I did not find any reference to these in the Discussions. They have some of the highest Sharpe and Martin ratios on the List in all but 1-y windows. Both have consistent ~ 10% or better APRs in the same windows and NAV returns that are on par or better than MaxDDs (also, apparently, based on NAV). MFO puts these in the general 'Corporate Bond' category while M* has them as 'High Yield'.
Just wondering why they have not gotten more attention and if you have any thoughts on either one.
MPV
Strategy
Fund invests primarily in privately placed, below-investment grade debt obligations purchased directly from their issuers and often accompanied by equity features, with additional allocations to publicly traded debt securities, including high yield securities.
MCI
Strategy
Fund invests principally in privately placed, below-investment grade, long-term debt obligations and often accompanied by equity features, purchased directly from their issuers and sourced through Barings extensive deal network of private equity sponsors.
Comments
https://www.barings.com/en-us/guest/funds/closed-end-funds/barings-participation-investors
Both are leveraged at 11% per M* but to find them you have to search for the name not the symbol MVP
Low volume, private loans high premium could be recipe for trouble. I would do a lot more digging
Also the Barings Participation ticker is https://www.cefconnect.com/fund/MPV and not MVP
I do not like to pay premiums for CEFs either, but if M* is to be believed MPV looks to have been bouncing between premium / discount in 3-4 years a runs and the current premium sequence has just started - as unpredictable as it might be.
Your issue with (relatively) low volume is fairly taken, but if one treats this as a long-term investments - waiting a few days for a limit order to fill should not be an problem, I'd think.
The main selling point for me is that MPV has had
NAV maxDD of -10.83% over 20 years!
(And a maxDD of -5.80% / -2.98% over 10 year per MFO / M*.)
All of this, while generating avg NAV returns of:
1-Year 8.39%
3-Year 7.85%
5-Year 9.45%
10-Year 8.78%
15-Year 10.57%
20-Year 10.23%
LOF 10.68%
I am no expert on fixed income and I understand private loan investing even less - that's why I hire professionals by buying mutual funds...
But can anyone name any other mutual fund and/or any other (accessible) investment that returned > 10% avg annually over 20 years with a single DD of ~ -10% and several ~ 5% over this time?
Seriously, I'd really like to find a few!
[Yeah, I remember about the price premium/discount w CEFs, but ultimately MPV's average Price performance is arguably even better than NAV's. It also makes a Price maxDD of ~ -20% - not bad in-and-of itself given the returns - a lot easier to swallow, when you know that the underlying asset keeps ticking up @ 10% avg annual almost w/o drops...]