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Well, I own it too. First let me get on my soap box. WHEN you buy vS WHAT you Buy. Which also means WHEN you sell, or don't.
Now, we cannot really expect fund to outperform VFINX and then also continue to outperform when the brown stuff hits the fan.
I'm not buying s***. However, I'm not selling this one for no other reason than I didn't expect it to hold up in bear market. I'm more pissed at FMI and Oakmark funds.
I sold it on 3/26 and split the proceeds on the same day between adding to current position AKREX and opening a new position in YAFFX. I prefer funds that protect the down side. I thought this one might do that but results proved me wrong. Take a look at it's upside/down side capture ratio. Pretty poor looking at the past 3 years. The past 1 year returns are very disappointing too.
Oh well, when the results were in, it didn't meet my expectations, which may have been more about CAPE sounding like a great idea. And the secret bond sauce, how tantalizing it was. I wanted to think it was a great long term concept versus relying on managers picking stocks and holding cash, but that's not what the data says.
Glad you started the discussion again. I'm also curious how others see it now.
When I rebalanced at the end of last year I still had a 50-55% stake in equities. This is simply one of the funds I chose to hold onto. Given its strategy -- it's a value fund -- I had no expectation it would behave like utilities, staples, infrastructure, low volatility, or health.
I don't think I have seen a more misunderstood stock fund before. I think the Doubleline website does a good job of explaining how it works, but I wonder how many people did proper research on it.
I too have had a toe-hold in DSEEX. I did not buy it to outperform the market. I interpreted Doubleline’s description that it would CYA based on the CAPE strategy. My bad.
I reduced DSENX, but still hold a decent chunk. With proceeds I initiated a position in RLSFX based on its great performance and my agreement with a strategy of shorting risky companies and going long in winners. I have no experience with L/S funds, so I could get burned.
@Bobby- If you need to edit or correct a posting, note the small "gear" symbol over on the upper right side of your post. Click on that, then click on "Edit".
I think the Doubleline website does a good job of explaining how it works, but I wonder how many people did proper research on it.
Proper research? @fundfun, it is pretty hard to research how a fund may perform in a bear market if it's never been in a bear market. Now we know. A lot of Doublelines info is a sales pitch. Actually the best information I've seen is in past posts here at MFO.
CAPE is a simple concept. That is explained. The bond-derivative part is not explained well at all, so investors have nothing but performance to go by and a leap of faith. From the start this fund was great. The past couple years when value has underperformed so did this fund. Now we know it won't hold up well when bonds are selling off. Now we know.
The Gundlach bond sauce has been a drag for some time now, not a plus, since before this crisis, although CAPE all on its own has lagged SP500 slightly also for some time.
The bond sauce makes DSE_X more like holding CAPE plus some gogo Pimco fund, or even non-gogo Pimco funds. The fact that it 'added' 6.5% to the ytd loss, if my calcs are right, actually makes Gundlach's bond work look rather better than PONAX and PDVAX and FADMX, forget PCI and PDI.
MikeM The portfolio is the Cape ETN and a portfolio of bonds similiar to the Doubleline Low Duration bond fund which is down 4-5% this year. This year (3 months) is the first time the fund under-performed it's Mstar category for any period of time. It is more volatile than its category peers. I bought it because I liked the concept and after seeing some of the PIMCO stock plus funds knew over the longer term it should outperform the benchmark. I like a few of the Doubleline managers and think that Jeff loves attention and is a good marketer and probably has too many funds. I have had good and bad luck with many profiled funds on here and most of them turn out to be average or below, which is unfortunately how this works. The Int'l CAPE fund has done horribly since the beginning. I owned it for a year and bailed. I guess we have now learned the the only bonds that hold up in a crash are Treasuries.
@fundfun, I'm not seeing in the Doubleline fund description any where the special bond sauce is the Doublelne low duration fund.
I'm pushing back here because you said that Doubleline does a good job explaining how this fund works. Based on that you say people didn't research the fund properly. I guess I take exception to that comment. DL does not explain the bond side, only that they use derivatives in that space. The bond side is not the low duration fund you point to. You may see that the bond side acts "similar" in return to low duration, but that is after the fact statement. No pre-buy research.
Also on performance per M*, they categorize this fund as LC blend. To that the fund has under-performed the past 1 month...98 percentile, YTD...96 pct, 1 year...90 pct and 3 year... 80 pct. All this with extra volatility.
The fund and the CAPE concept is very intriguing. I don't fault anyone for hanging on or even adding to because of that fact. But data does show it performing poorly in this bear environment. That's the important research to help understand what your buying, at least for me.
I think MikeM is right. We shareholders should have seen how DSENX behaved in the market swoon at the end of 2018. Those of us who held it saw great returns for the next year, but the fund had shown itself to be weak in a downturn.
'Poorly performing, extra volatility, weak in downturn', these phrases make me think you guys should be glad not to be holding TILCX, for example. Much less an actual subpar fund. (Who thought it would be comparatively stronger in a downturn? It's not a balanced fund.) Until the middle of March DSE_X has tracked SP500 pretty closely, above it often but more recently below it. The last few weeks have been worse, no question, with the new bond problems which have surprised everyone.
I believe @msf more than once in the past has attempted savvy descriptions or perhaps informed speculations of the ingredients of the bond sauce.
That was some time ago. As I recall, I tried without great success to match the performance of the bond portion of the portfolio with various other DoubleLine funds. There wasn't a good match unless one took it piecemeal, finding it similar to a given fund in one year, similar to a different fund the next year.
Again from memory, I think it looked like the bond portion was becoming more conservative. But I'm not sure I remember that correctly. All in all, what I was doing felt like Lord Rutherford shooting alpha particles at gold foil, except that the foil was transmutating over time.
maybe this was more just an explan or delving of what derivatives are in the first place and how they likely work in this instance, now working less well
here is msf: I was simply addressing the comment that the fund is opaque. Its practices and use of derivatives seem rather transparent (IMHO moreso than many funds); its bond holdings and the equity index it is tracking are not.
from FD1000: DSEEX-First, managers invest in global bonds then, they look at 11 US stock sectors and select 5 undervalued sectors, then take 4 sectors out of 5 with the best momentum. They don't invest directly in the index but in a derivative that is similar to the index. Basically, you get 200% investments for the price of 100%. You get real bonds + derivative of stock indexes. To make even simpler, let's assume they invest in just one sector SPY and assume the bond portion makes 3-4% annually. It means, the performance will be SPY + 3-4% - (paying for derivatives).
@davidrmoran Folks could argue forever on what a fair benchmark for DSENX would be. For me, it's VTI, because that's what the balance of my domestic holdings is in. My takeaway is that DSENX has underperformed a domestic index fund. I know that's an overly simplistic analysis, but that's the one I use. (see below)
@fundfan Yes, many of the profiled funds do underperform (again, it would be difficult to agree upon an appropriate benchmark). That's why I use my version of a core and explore portfolio (90% index funds and 10% funds that I learn about on boards such as this one).
@MikeM I guess I can rephrase that. I found the info on the fact sheet of the fund to give me what I needed to determine what the bond portfolio looked like. I then looked at the holdings of other funds and landed on the low duration fund. I think my issue is the fund down a little more than than the s&p or large value and there seems to be the thought of something wrong with it when Mstar shows it is more volatile.
@Bitzer I agree with you but I am probably 50/50 or so not 90/10. I have been on the site since FundAlarm and I have gone through the list over the years and many funds are no longer around or sounded promising and just weren't. I guess just like the Spiva reports we are lucky to find any funds that consistently beat the benchmarks or at least do well on a risk adjusted basis. I started using mostly factor ETFs/Funds like DSEEX kind of is because of this.
@fundfan The more I read SPIVA reports and the Spindices blog, the more I like them and the State Street target date (index) funds. I still like to have fun with my 10% "fun" investments (most of which I wish I had used to purchase index funds)
@bitzer I feel the same way about my "fun money" forays into long/short,market neutral and multialternative funds. I would have done better with VWINX AONIX or SGNVX .
I think this has been a learning experience for all of us -- yet again. Although I'm also disappointed in how FMI funds have held up, I have other's who have pleasantly surprised me, Akrix, Mggpx, Prblx and even Jsmvx. I'm keeping the FMI funds as I don't believe anyone could have foreseen this event. I thought about purchasing DSENX but didn't have room for it. Thank you for sharing your experiences.
Comments
Now, we cannot really expect fund to outperform VFINX and then also continue to outperform when the brown stuff hits the fan.
I'm not buying s***. However, I'm not selling this one for no other reason than I didn't expect it to hold up in bear market. I'm more pissed at FMI and Oakmark funds.
@Bitzer, go read other thread, DSEEX
https://mutualfundobserver.com/discuss/discussion/comment/123584/
maybe these thoughts will help
Oh well, when the results were in, it didn't meet my expectations, which may have been more about CAPE sounding like a great idea. And the secret bond sauce, how tantalizing it was. I wanted to think it was a great long term concept versus relying on managers picking stocks and holding cash, but that's not what the data says.
Glad you started the discussion again. I'm also curious how others see it now.
CAPE is a simple concept. That is explained. The bond-derivative part is not explained well at all, so investors have nothing but performance to go by and a leap of faith. From the start this fund was great. The past couple years when value has underperformed so did this fund. Now we know it won't hold up well when bonds are selling off. Now we know.
CAPE ytd = -24.5
DSENX ytd = -31.1
The bond sauce makes DSE_X more like holding CAPE plus some gogo Pimco fund, or even non-gogo Pimco funds. The fact that it 'added' 6.5% to the ytd loss, if my calcs are right, actually makes Gundlach's bond work look rather better than PONAX and PDVAX and FADMX, forget PCI and PDI.
So 'good until it wasn't' isn't the case, as I understand the phrase, which applies more to our favorite punchees Miller, Berkowitz, Heebner, et alia.
I like a few of the Doubleline managers and think that Jeff loves attention and is a good marketer and probably has too many funds. I have had good and bad luck with many profiled funds on here and most of them turn out to be average or below, which is unfortunately how this works.
The Int'l CAPE fund has done horribly since the beginning. I owned it for a year and bailed.
I guess we have now learned the the only bonds that hold up in a crash are Treasuries.
I'm pushing back here because you said that Doubleline does a good job explaining how this fund works. Based on that you say people didn't research the fund properly. I guess I take exception to that comment. DL does not explain the bond side, only that they use derivatives in that space. The bond side is not the low duration fund you point to. You may see that the bond side acts "similar" in return to low duration, but that is after the fact statement. No pre-buy research.
Also on performance per M*, they categorize this fund as LC blend. To that the fund has under-performed the past 1 month...98 percentile, YTD...96 pct, 1 year...90 pct and 3 year... 80 pct. All this with extra volatility.
The fund and the CAPE concept is very intriguing. I don't fault anyone for hanging on or even adding to because of that fact. But data does show it performing poorly in this bear environment. That's the important research to help understand what your buying, at least for me.
I believe @msf more than once in the past has attempted savvy descriptions or perhaps informed speculations of the ingredients of the bond sauce.
Again from memory, I think it looked like the bond portion was becoming more conservative. But I'm not sure I remember that correctly. All in all, what I was doing felt like Lord Rutherford shooting alpha particles at gold foil, except that the foil was transmutating over time.
maybe this was more just an explan or delving of what derivatives are in the first place and how they likely work in this instance, now working less well
I was simply addressing the comment that the fund is opaque. Its practices and use of derivatives seem rather transparent (IMHO moreso than many funds); its bond holdings and the equity index it is tracking are not.
from FD1000:
DSEEX-First, managers invest in global bonds then, they look at 11 US stock sectors and select 5 undervalued sectors, then take 4 sectors out of 5 with the best momentum. They don't invest directly in the index but in a derivative that is similar to the index.
Basically, you get 200% investments for the price of 100%. You get real bonds + derivative of stock indexes.
To make even simpler, let's assume they invest in just one sector SPY and assume the bond portion makes 3-4% annually. It means, the performance will be SPY + 3-4% - (paying for derivatives).
long thread discussion, if anyone wants to get into the weeds of volatility and more (ah, those were the days):
https://www.mutualfundobserver.com/discuss/discussion/comment/114551
@fundfan Yes, many of the profiled funds do underperform (again, it would be difficult to agree upon an appropriate benchmark). That's why I use my version of a core and explore portfolio (90% index funds and 10% funds that I learn about on boards such as this one).
I think my issue is the fund down a little more than than the s&p or large value and there seems to be the thought of something wrong with it when Mstar shows it is more volatile.
@Bitzer I agree with you but I am probably 50/50 or so not 90/10. I have been on the site since FundAlarm and I have gone through the list over the years and many funds are no longer around or sounded promising and just weren't. I guess just like the Spiva reports we are lucky to find any funds that consistently beat the benchmarks or at least do well on a risk adjusted basis. I started using mostly factor ETFs/Funds like DSEEX kind of is because of this.