MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Hedge Fund Strategies That Act As Bond Surrogates

davfordavfor
edited October 2020 in Fund Discussions
The zero interest rates problem is forcing investors to rethink the traditional 60-40 portfolio and evaluate just what is the role of the "40."

Alternatives are increasingly being used as 'bond surrogates' in the place of traditional fixed income allocations.

QAI, BTAL, HDG, MNA are popular. BIMBX and WNMIX are the best choices.
https://seekingalpha.com/article/4381438-hedge-fund-strategies-act-bond-surrogates

Comments

  • carew388carew388
    I own both BAMBX and MNWAX at Fidelity and Schwab. They are ntf at both brokerages, which the article failed to mention. Also use MERFX HMEAX and BALPX. Multiple funds, but I just don't like "putting all my eggs" in one alternative basket !
  • davidrmorandavidrmoran
    wow
  • JD_co
    Addl ideas:

    ARBIX Absolute Convertible Arbitrage Fund ($25K min)
    SVARX Spectrum Low Volatility Fund
    DRSK Aptus Defined Risk ETF
  • TheShadowTheShadow
    EVDAX (no load as I am grandfathered from paying load since owning initial fund) and MERFX
  • Old_JoeOld_Joe
    Looking at MNWAX at Schwab, I see a ytd return of -1.87% as of 9/30,but +3.58 as of 10/28.

    With BAMBX, it's -0.04% and +3.41%, same dates.

    What's the story on that?
  • catch22catch22
    edited October 2020
    Hi @Old_Joe
    I find this at Stockcharts for the two you mentioned. Placing a cursor at 9-30 date (on chart lines) shows a virtual tie for YTD at +4.12 and +4.13%.
    You may also right click onto the slider below the chart (showing 210 days) and select 30 days for more recent actions.
    The BAMBI choice did a bit better over their short life span, but took a bigger hit in March, versus the MINWAX fund. Sorry, the tickers reminded me of these proper names.

    CHART
  • wxman123
    I like TMSRX.
  • FD1000
    edited October 2020
    The best choices from the above are
    SVARX Spectrum Low Volatility Fund
    DRSK Aptus Defined Risk ETF

    But no fund can meet my criteria, at least 6% annually, SD<3 and never lose more than 3% from any last top.

  • linter
    and no fund you own meets that criteria either, annually-speaking, so your point is?
  • FD1000
    linter said:

    and no fund you own meets that criteria either, annually-speaking, so your point is?

    My point is that I do my own hedging/trading and get better results.

  • Baseball_Fan
    IQDAX, Q Infinity fund

    positive returns, low correlation to the stock and bond market, liquid, high alpha, low beta, good asymmetric risk/reward profile, high minimum, black box aspect, yes, but what the heck am I really invested in, is your risk manager up to the task, or will I get a nasty "surprise" one day "ala IOFIX"?

    Best,

    Baseball_Fan
  • FD1000
    edited October 2020
    The problem with all/most alternative funds is...they don't sustain their risk/reward long.
    Arnott with PAUIX sounded so great in 2010 just to disappoint in the next 10 years..
    AQR have several funds based on their research(risk parity, futures, macro, alternative,,,) and disappointed too.

    IOFIX wasn't a surprise for me. When investors want their money immediately and there are no buyers, the price will go way down, especially with niche, special holdings.
    But look at IOFIX LQD is liquid high-rated Corp bond fund. Peak to through it lost over 18% until the Fed announced it will start buying these bonds. If the Fed wouldn't do it the situation would be worse.
  • davfordavfor
    edited October 2020
    Interesting group of funds thus far presented here. A quick and dirty review suggests SVARX has for me provided the most appealing combination of total return and downside protection from this group during its lifetime (7 years).....September saw me moving ~5% of my portfolio from bond funds to utility stocks. Will include SVARX in my thinking about possible changes among the bond funds.
Sign In or Register to comment.