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I'm not glorifying anything. I'm just calling what it is. Rebalancing is a gray area. I'm talking about switching funds. I'm also talking about the meaning of a trader, the definition isn't accurate and many can't admit they are traders. The bottom line is the fact that I don't care what anyone does, the most important is someone's risk/ reward based on their goals.
For the past two months, I have been following two "Market Neutral" funds, QQMNX and VMNFX, which held up very well and provided some protection during recent market downturns. New managers have been at the helm of both funds since 2021.
As MikeM said: "I have to admit, QQMNX is a tempting alternative in this alternative field for a less bumpy ride and, so far, excellent returns."
As a retired investor who doesn't need a lot more money, preserving capital is more important to me than seeking sizeable returns on capital. While both funds have excellent risk/reward profiles, I have decided to add QQMNX to my portfolio at this time of fairly high equity valuations.
A couple other market neutral funds you can consider: BDMAX and JMNAX. BDMAX has outperformed QQMNX over the last 1 and 2 year trailing periods, and has a higher Sharpe ratio and lower standard deviation over the last 3 years according to Morningstar data. JMNAX has had lower returns, but has a smooth ride. I use a combination of BDMAX and JMNAX, but I might consider adding QQMNX. Thanks for bringing it up.
And thanks for bringing up BDMAX and JMNAX, much appreciated.
Unfortunately, BDMAX has a 5.25% load at my brokerage firm. But, another share class, BDMIX, may be available in an IRA with no minimum investment limit. Still checking it out.
However, JMNAX looks very promising and, as you said, it offers a "smooth ride" with a very low standard deviation of 4.35%. It's available NTF (No Transaction Fee) and offered load-waived.
I will continue to monitor both funds. I am currently fully invested, but some of my CDs are maturing early next year and will make some investable cash available.
I've learned to expand my definition of alternative funds. I look at PVCMX as an alt fund in that it uses cash for defense - in a manner quite different from most other funds (thus the ALT view).
Low SD of 5, with a 7.84% 5 yr return. It's worst quarter in 5 years was -(1.83%).
I had purchased QQMNX recently as well, but that's it for market neutral funds. It will sit alongside HMEZX, RSIVX, WBALX, CBUDX, CBLDX. Low SD grinders that I hope get me close to 7% annually.
@fred495 you are welcome. I’m surprised you would have to pay a load for BDMAX at your brokerage, as the brokerages I have experience with offers the fund load waived. Hopefully you can have access to institutional shares if you are interested in the fund.
@BaluBalu I really just use the fund to help mitigate the volatility of my portfolio. It has been pretty steady, particularly as far alternative funds (which are often disappointing), so I have been sticking with it. I initially went into this fund and researching other market neutral or absolute return type funds to get what are (or what used to be) bond or bond fund-like returns while trying to diversify from bonds for those returns.
Opened a position in QQMNX today. No trade fees at Schwab which was a pleasant surprise so I purchased additional small lots too with the small cash positions I had in a few retirement accounts.
Comments
Rebalancing is a gray area.
I'm talking about switching funds. I'm also talking about the meaning of a trader, the definition isn't accurate and many can't admit they are traders.
The bottom line is the fact that I don't care what anyone does, the most important is someone's risk/ reward based on their goals.
And thanks for bringing up BDMAX and JMNAX, much appreciated.
Unfortunately, BDMAX has a 5.25% load at my brokerage firm. But, another share class, BDMIX, may be available in an IRA with no minimum investment limit. Still checking it out.
However, JMNAX looks very promising and, as you said, it offers a "smooth ride" with a very low standard deviation of 4.35%. It's available NTF (No Transaction Fee) and offered load-waived.
I will continue to monitor both funds. I am currently fully invested, but some of my CDs are maturing early next year and will make some investable cash available.
Thanks again, Chinfist.
Low SD of 5, with a 7.84% 5 yr return. It's worst quarter in 5 years was -(1.83%).
I had purchased QQMNX recently as well, but that's it for market neutral funds. It will sit alongside HMEZX, RSIVX, WBALX, CBUDX, CBLDX. Low SD grinders that I hope get me close to 7% annually.
Many true ALT funds are finicky.
@BaluBalu I really just use the fund to help mitigate the volatility of my portfolio. It has been pretty steady, particularly as far alternative funds (which are often disappointing), so I have been sticking with it. I initially went into this fund and researching other market neutral or absolute return type funds to get what are (or what used to be) bond or bond fund-like returns while trying to diversify from bonds for those returns.