Came across MPV (Barings Participation Investors) and MCI (Barings Corporate Investors) on the Great Owl List.
I've been thinking of adding to my bond positions and was a bit surprised when I did not find any reference to these in the Discussions. They have some of the highest Sharpe and Martin ratios on the List in all but 1-y windows. Both have consistent ~ 10% or better APRs in the same windows and NAV returns that are on par or better than MaxDDs (also, apparently, based on NAV). MFO puts these in the general 'Corporate Bond' category while M* has them as 'High Yield'.
Just wondering why they have not gotten more attention and if you have any thoughts on either one.
MPV
Strategy
Fund invests primarily in privately placed, below-investment grade debt obligations purchased directly from their issuers and often accompanied by equity features, with additional allocations to publicly traded debt securities, including high yield securities.
MCI
Strategy
Fund invests principally in privately placed, below-investment grade, long-term debt obligations and often accompanied by equity features, purchased directly from their issuers and sourced through Barings extensive deal network of private equity sponsors.
Comments
https://www.barings.com/en-us/guest/funds/closed-end-funds/barings-participation-investors
Both are leveraged at 11% per M* but to find them you have to search for the name not the symbol MVP
Low volume, private loans high premium could be recipe for trouble. I would do a lot more digging
Also the Barings Participation ticker is https://www.cefconnect.com/fund/MPV and not MVP
I do not like to pay premiums for CEFs either, but if M* is to be believed MPV looks to have been bouncing between premium / discount in 3-4 years a runs and the current premium sequence has just started - as unpredictable as it might be.
Your issue with (relatively) low volume is fairly taken, but if one treats this as a long-term investments - waiting a few days for a limit order to fill should not be an problem, I'd think.
The main selling point for me is that MPV has had
NAV maxDD of -10.83% over 20 years!
(And a maxDD of -5.80% / -2.98% over 10 year per MFO / M*.)
All of this, while generating avg NAV returns of:
1-Year 8.39%
3-Year 7.85%
5-Year 9.45%
10-Year 8.78%
15-Year 10.57%
20-Year 10.23%
LOF 10.68%
I am no expert on fixed income and I understand private loan investing even less - that's why I hire professionals by buying mutual funds...
But can anyone name any other mutual fund and/or any other (accessible) investment that returned > 10% avg annually over 20 years with a single DD of ~ -10% and several ~ 5% over this time?
Seriously, I'd really like to find a few!
[Yeah, I remember about the price premium/discount w CEFs, but ultimately MPV's average Price performance is arguably even better than NAV's. It also makes a Price maxDD of ~ -20% - not bad in-and-of itself given the returns - a lot easier to swallow, when you know that the underlying asset keeps ticking up @ 10% avg annual almost w/o drops...]
There are no funds in the database that have returned 10% or more annualized for 20 years with a MAXDD about -10% or less, except one: MPV. But again, that's NAV based. Here's chart from M* showing difference between NAV and Price for MPV. Clearly, a lot more volatility in Price.
I believe someone on board once quoted: "All NAVs are opinions." In the case of MPV, it's kind of like getting an appraisal on your house. Stays steady until next appraisal or until you go to sell. Taking the long view will help.BTW. The NAVs for MPV and MCI are only updated every three months.
Here are a dozen Great Owl US funds with the lowest MAXDD over last 20 years that have also returned 10% annualized. There are actually about 450 funds that have returned that well, but typically with more pain.
The dozen listed in table above are: Barings Participation Investors (MPV), Barings Corporate Investors (MCI), GMO Quality III (GQETX), Natixis Vaughan Nelson Select A Small Cap Value A (NEFJX), Alger Growth & Income A (ALBAX), Needham Aggressive Growth Retail (NEAGX), Amundi Pioneer Fundamental Growth A (PIGFX), FMI Common Stock Inv (FMIMX), Victory Sycamore Established Value R (GETGX), Williamsburg Government Street Opportunities (GVMCX), Fidelity Select Leisure Portfolio (FDLSX), and State Street Elfun Trusts (ELFNX).I suspect if MPV and MCI were open-ended funds, they would not be on the list.
Hope this helps.
c
https://www.barings.com/en-us/guest/funds/closed-end-funds/barings-participation-investors
Ty for that last screenshot. I was not aware that one could force symbols into a search result. That is super useful to me.
Also, working with Lipper to try and get Price histories, not just NAV.
Curious. If I'm successful, I'm thinking that risk and return metrics and ratings for CEFs and ETFs should be Price based. Any opinions?
I'm able to click on the link I posted and get to a Barings page which shows $0 in assets for MPV.
M* uses NAV in their ratings, like we do.
Also, the returns in our flows data are NAV based too.
With ETFs the differences typically are small, typically arbitraged out. But in less liquid CEFs, seems much less so.
Perhaps add a group of priced based metrics for ETFs and CEFs, but keep separate from regular NAV based metrics. Basically, to help provide visibility into price volatility.
The approach I chose was to fabricate a "priced-based" fund denoted by the ticker symbol preface of "PB-". Metrics for ticker MPV are NAV-based, the default standard on MFOP, but ticker PB-MPV reflect the new Priced-Based risk and return metrics.
In MultiSearch, you can now just punch in the extra "PB-" ticker(s), or click "Include Priced-Based Metrics," when you set selection criteria and run the search.
I find the results pretty insightful.
Will be posting more in the December commentary.
it went into an indefinite loop - it may be that some columns get undefined for "PB-xxx"it took a long time to finish, but then I could see all columns populated.Also, some Multisearches are just running wild today and produce a truncation message and 1,001 results - all besides the first 1-2 are unrelated to the tickers searched.
But some runs were odd in that there were 1001 tickers in the results, not just columns. I used Reset a few times but could not consistently repeat the problem. I had to Reset because I started getting out-of-memory message after 2 or 3 of these odd runs.
Can you Zoom? I will email you link.
c