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PGAEX - Interesting New Alt Fund

LewisBraham
in Fund Discussions
PGAEX caught my eye because of the manager's background: https://pgim.com/investments/mutual-funds/pgim-wadhwani-systematic-absolute-return-fund
Dr. Sushil Wadhwani, CBE, is the Chief Investment Officer for PGIM Wadhwani, originally founded as Wadhwani Asset Management in October 2002. Prior to joining PGIM Wadhwani, Sushil served as the Founder and Chief Executive Officer of Wadhwani Asset Management. Previously, Sushil was a Member of the Monetary Policy Committee at the Bank of England. He also served as the Director of Quantitative Systems at Tudor Investment Corporation, Director of Equity Strategy at Goldman Sachs, and as an academic economist at the London School of Economics. Sushil is an emeritus governor at the London School of Economics and a Commander of the Order of the British Empire. Sushil earned a BSc, MSc and PhD from the London School of Economics and Political Science.

Comments

  • Ted_TurnerTed_Turner
    Interesting is right! But I wonder how it will perform in an up market. M* says PGIM Funds' parent company is Prudential.
  • Dennis Baran
    PGAEX has a 5.5% load. But PGAGX, the Z class is NL with an ER of 1.15%. MFOP shows it to have a negative correlation with the SP 500. Available at VG w/a TF. $500 General and IRA. Yes, interesting. It has a low R (36%) with my VELIX, a large cap Long-Short Alt Equity fund. Worth watching. Thx Lewis.
  • AndyJ
    The Z class is TF and $2.5k minimum at Fidelity. Yes, worth a good look.
  • BenWPBenWP
    $2,500/$1000 at Schwab with a TF.
  • BenWPBenWP
    My money is on and in REMIX for macro trading.
  • hank
    edited June 2022
    “How to Build Your Own Hedge Fund For Less” - By Lewis Braham / Barrons, June 2, 2022

    The LINK worked for me on the first go. Give it a try.
  • yogibearbullyogibearbull
    Long and short DIY is easier said than done. And if professionals cannot do it well, how can retail investors?
  • LewisBraham
    edited June 2022
    While I do indeed think it's possible to build your own long-short stock portfolio successfully as most long-short stock fund managers don't really do much shorting and charge high fees for that, I think it's important to note that PGAEX is not a long-short stock fund. It's categorized as Macro Trading by Morningstar, which I think is much trickier for retail investors to do on their own. That's because it doesn't just long and short stocks, but invests in derivatives of currencies and bonds via futures contracts--hard for a retail investor to do--and makes big macro forecasts--also hard to do.
  • orage
    Might be worth watching over time. But the SAI, dated 2/15/22, shows the four managers each with $0 invested. Classes Z and R6 are supposedly not available to retail investors. Also, per the prospectus, also dated 2/15/22 but containing information only through 10/31/21, classes A, C, Z and R6 had $11k, $10k, $10k and $30.675M invested. Moreover, the AR is dated 10/31/21 for a fund that started only on 9/28/21, yet now in June there's no semi-AR from 3/31/22.
  • Dennis Baran
    @orage As noted above, PGAGX, the Z class, is available at VG.
  • LewisBraham
    edited June 2022
    Annual report: https://prospectus-express.broadridge.com/PNet/summary.asp?clientid=pi&fundid=74440K512&doctype=ann
    This actually provides a lot of good information regarding how the manager performed prior to the public mutual fund launch: https://pgim.com/investments/getpidoc?file=53A2BEADFE444CD28278B272E004FD34
    Also, loads are waived at some brokers now for "A" share classes, and it is unusual in a new fund for a manager to put a lot of their money in it as soon as it launches. It happens, but it's unusual. But I agree it's early days and it's too soon to say the fund has proved itself. I merely am stating the manager's background is impressive and the strategy is interesting.
  • hank
    edited June 2022
    Thanks for the additional remarks @LewisBraham. Was just waiting for a chance to share your recent piece. Agree there are substantial differences.

    For a long while James Stack has been recommending around 10% in a low cost inverse bear fund and he’s been spot-on. I’ve chosen to ignore his advice and have tried hedging with TAIL. Hasn’t worked nearly as well as the bear fund would have. My guess is that the relatively low VIX readings have been part of the problem.
  • yogibearbullyogibearbull
    VIX is hardly low. VIX of 19+ implies daily volatility of +/- 1%+ (lot) and we are seeing high daily volatility. But SKEW is low indeed. So, we have high fear gauge but investors are not rushing to buy puts to hedge. VIX during crisis is much higher. Long-term average may be in high-teens.

    VIX & SKEW (1 yr; change to other times) https://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=1&mn=0&dy=0&id=p15880966674

    Long-term VIX https://www.macrotrends.net/2603/vix-volatility-index-historical-chart
  • LewisBraham
    My impression with TAIL is it has problems with its bond allocation, which is in intermediate term US Treasuries-- a bad bet in a rising rate environment.
  • carew388carew388
    PGAEX ntf at Schwab $100 minimum.
  • AndyJ
    edited June 2022
    Dennis Baran said:

    @orage As noted above, PGAGX, the Z class, is available at VG.

    And Fidelity and Schwab.

  • finder
    edited June 2022
    The same manager in a related ~ 2 years old fund in UK : https://markets.ft.com/data/funds/tearsheet/summary?s=IE00BKV41X02:AUD
  • BenWPBenWP
    Schwab's page for PGAEX lists its gross expense ratio as 175.28% while the net ER is 1.4%. I can't recall ever seeing an ER of any stripe as high as that.
  • yogibearbullyogibearbull
    edited June 2022
    There isn't much AUM at launch and PGIM hasn't seeded it with its own capital, so the ERs look huge but are capped. I have seen high but capped ERs at launches but not this high.

    Alternative ways to launch funds are 1) use seed capital from the firm that is withdrawn a few years later, 2) lineup some institutional buyers/sponsors ahead, or launch a fund on institutional request(s) but open it to others, 3) use the weird subscription process of several weeks that Vanguard uses where the money collected just sits in m-mkt funds until deployed (I don't understand who these foolish investors are who fall for this).

    PGAEX Prospectus from PGIM Site https://prospectus-express.broadridge.com/PNET/summary.asp?clientid=pi&fundid=74440K512&doctype=pros
  • Dennis Baran
    The fund has a $49.95 TF at Schwab.
  • LewisBraham
    edited June 2022
    Not PGAEX, which is NTF: https://schwab.com/research/mutual-funds/quotes/summary/pgaex
    PGAGX is the one with the transaction fee: https://schwab.com/research/mutual-funds/quotes/fees/pgagx
    The waived expense ratio is worth paying attention to, though, for sure. I've never seen that pre-waiver fee level before either.
  • Dennis Baran
    Thx Lewis. Easy to mix these symbols up sometimes!
  • carew388carew388
    PGAEX up 1.46% today. I bought a tiny amount today just to track it !
  • AndyJ
    edited June 2022
    I like the portfolio reporting. They clearly show what they're long and short, and what their investment universe is. And right now, you can see how much they adjusted in one month between the end of March (the fact sheet as of date) and the end of April (the fund page portfolio tab).

    Note the lack of commodities, could be largely why it's up 6% or so ytd and not the 20%+ of some futures funds that include them.
  • MikeM2
    SVOL of interest to anyone?
  • fred495
    MikeM2 said:

    SVOL of interest to anyone?


    A new fund without much of a track record, SVOL has lost 12% YTD, and 5% over the past year.

    Why would anyone be interested? What am I missing?

    Fred
  • MikeM2
    High income. I didn't see it on Yahoo finance; 19% yield on Simplify's website. Probably not sustainable but it made me look twice.
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