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Is it worth chasing this funds performance ?

RLSFX I received annual report, RiverPark, this morning & was shocked on the performance of this fund ! Since inception it has kicked it's competition to the curb !
As per M*
12Comparison of Change in the Value of a $10,000 Investment in the RiverPark Long/Short Opportunity Fund,Retail Class Shares, versus the S&P 500 TR Index and the Morningstar Long/Short Equity CategoryAVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED SEPTEMBER 30, 2020One Year ReturnAnnualized 3 Year ReturnAnnualized 5 Year ReturnAnnualized 10 Year ReturnAnnualized Inception to Date*Institutional Class Shares47.71%19.33%15.81%11.21%10.38%Retail Class Shares47.47%19.12%15.58%11.04%10.22%S&P 500 TR Index15.15%12.28%14.15%13.74%13.40%Morningstar Long/Short Equity Category1.78%1.90%3.25%3.37%3.20%
The important #'s RSLFX 10.38 VS category ave. 3.20 since incepetion.

Stay Safe, Derf


  • Not for me. While it certainly beats the britches off it's category it trails the S&P 500 by nearly an equal gap. I guess it all depends on what you're after or trying to achieve.
  • I'm sounding like a broken record here, but 2020 was an unusual year. Take a look at its performance since inception through 2019 instead. Over the 7¾ years, it achieved an annualized return of 5.156% vs its peers' 3.936%. Still impressive, but far from the 7% advantage you're seeing to date.

    Inception to Dec 31, 2019 chart. IMHO this chart really puts this fund into perspective.

    Irrespective of the fact that most of the figures you gave are long term (multi-year) results, what they're really showing you is short term performance. That's because the past year has so distorted the longer term averages. So the next question is why did it do so well on a relative basis this year?

    Look at its portfolio (again in the context of the 2020 market). It's nearly off the scale on the growth side. (YTD, VIGAX has returned 36.89% vs. 16.13% for VFINX.) Was this a matter of skill, that the management took the fund to the right part of the market at the right time, or was it luck? The fund has always been growth leaning (check its portfolio history). Its peers are a much tamer group (look at the "Value and Growth Measures" section of the M* portfolio page for the fund.)

    I tend to look just as much at year by year performance as cumulative performance. Especially this year, one good year can skew the numbers. Likewise, while growth has tended to do better than value or blend for a long time, it hasn't had a year like this since the dot-com bubble burst.

    Difference in annual returns of growth and value (from Vanguard)image
  • @msf : Thanks for chiming in. After posting I also brought up their chart from inception.
    Looked to me like they had a shot in the arm , which probably skewed over all performance. When I looked at holdings it was easy to see they were holding some BIG gainers !
    Still if one is into L/S funds , take a look. Plus I'll mention ER is in the 2% range & M* gives it 5*, for what that's worth.
    Stay Safe, Derf
  • I'm a fan for the "play money" in my portfolio. The key to L-S funds is to exploit inefficiencies in markets where it's getting more and more difficult to do that. Long American Tower, short federal realty as an example. Most would agree that a cell tower reit has better prospects these days compared with shopping and mixed use real estate, but at some point each will be appropriately priced. Rubin has shown good skill at making the right calls. He got lucky this year with covid accelerating the trends he was already playing.
  • edited December 2020
    When you consider "chasing this funds performance", I would suggest you determine what kind of investor you are. If you are a trader, and very good at trading, you may want to identify hot performing funds, with the understanding that you are very skilled in exiting those hot funds when they cool off. If you are longer term investor, I would suggest you look at more than just recent performance, and you consider whether this is a fund that has a much more risky longer term performance pattern. You may want to also consider expense ratio, whether this fund is from a boutique company or a more reputable company with a solid research and management team, how volatile the fund, and determine the performance history in strong downmarket performance periods. I am not a good trader, and I rarely invest in the hottest performing funds, but I do think there are some good traders on these threads that are better traders than I am, especially at exiting hot funds when they cool off. Because I am not a good trader, I tend to only focus on funds that have a longer history of relatively solid performance, and which hold up relatively well in major down performance periods. I don't see RLSFX as a fund I would consider that fits my personal skill set.
  • @wxman123 & @dtconroe : Thanks for your replies, more is better!
    Enjoy your day & Stay Safe , Derf
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