Lipper Holdings for TMSRX
-1% Stocks
68% Bonds
30% Cash
3% Other
KEY STATISTICS
Total Net Assets $205.82M
Total Stock Holdings 35
Total Bond Holdings 141
% Foreign Stocks 8%
Portfolio Turnover Rate 100%
It’s hard to get a grasp on the inner workings of “alternative” (sometimes called black-box) funds. Actually, the layout above copied from Lipper is clearer than for many. Note the 1% (negative) holdings in equities (short position).
Just wanted to share. I do own it. My bigger gripe is the near 1.3% ER. However, that’s in line with similar funds, actually on the low end. Obviously, the managers aren’t “high” on prospects for stocks at current valuations.
my guess - The fund is long some stocks and short some others in roughly equal amounts. Net-net it’s 1% negative stocks. What about all that cash? Likely that’s to cover the short equity positions. Another oddity is that everything appears to equal about 100%. Funds that short equities and play in derivatives often have large cash / bond positions which laid out on paper display a total invested amount of 120% or greater / ISTM.
Comments
BTW, I also invested in it too since the inception. It will be interesting to see how this fund held up today as the market pullback.
Very confusing to understand the break down of distribution. Or am I missing something?
Derivitives in mutual funds
@MikeM - My less than expert take is that a lot of the cash / bond position is actually held in “reserve” to back the short positions. And that that method of displaying is to comport with SEC disclosure rules.
As Mark implies, I think, funds that play in derivatives can post some pretty weird numbers. One commodities fund I once owned would typically display about 150% cash and bonds. Consider that your fund manager has no way to store crude oil or pork bellies. So the “commodity” exposure in commodity funds is achieved with smoke and mirrors (derivatives).
If I can find another fund with weird numbers like that, I’ll post it here.
My take on owning TMSRX - “Making the best of a bad situation”. That’s because of the super low prevailing interest rates along with what appear to me to be overvalued equity markets. So, by default, TMSRX has just north of 12% of my retirement assets. On a sharp equity selloff, I’d probably cut that back a couple %. With funds like that it boils down to a matter of trust in the fund’s operator not to gamble with your money.
Just wondering, Derf
Can mgmt at TRP time these market moves correctly? Better to be too early than too late with their calls. Lets see how it all plays out.
What I meant was that if equities sold off sharply, I’d sell a couple percent of TMSRX and buy something more invested in equities - maybe add to PRSIX which has an ER about half of what TMSRX charges. TMSRX is 1 of 3 funds in my alternative camp. Combined they amount to 32% of holdings. Maybe drop it to 30%. We’re not taking about BIG moves here.
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@Crash - Here’s the Lipper breakdown on PRSNX
-13% Cash
111% Bonds
2% Other
0% Stocks
Total Net Assets $1.50B
Total Stock Holdings 1
Total Bond Holdings 560
% Foreign Stocks 0%
Portfolio Turnover Rate 144%
It’s not at all unusual for bond funds to hold short positions. Sometimes they’ll short the 30 year Treasury Bond. By doing so, they hedge losses in their shorter duration bonds when rates tick upward. Pretty sure DODIX has done that in the past. However, the short on a 30 year bond would only amount to a few percent.
Just Wondering, Derf