MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

DSENX and RGHVX, seriously

davidrmorandavidrmoran
in Fund Discussions
Thanks to MFO / Snowball / partner researchers, I've been tracking these two 'new' mutual funds since last Nov, and they are matching or outperforming everything else, pretty smoothly (including early Feb dip) except for some niche equity funds.

What gives? I am seriously thinking of transferring the majority, nonsmall, of retirement moneys to DSENX and RGHVX, 50-50. What could go wrong? (I know, if you have to ask....) I mean compared with what other funds?

Comments

  • Old_JoeOld_Joe
    edited July 2014
    Well, you should consider that with their rather short track record there is no indication of how they might perform in a downturn. Given the current market values, I think that the chances of some sort of market downdraft are pretty good right about now. I'd consider putting maybe 10 to 25k in each, and letting that ride until we see how they do in rough water.
  • catch22catch22
    edited July 2014
    May have been a "large cap value" May 31, 2014 per M*; but I would classify as commingled. Which is just fine, if the performance is in place. Ain't noth'in wrong with a well run, commingled fund.

    https://fundresearch.fidelity.com/mutual-funds/composition/258620814

    Regards,
    Catch
  • davidrmorandavidrmoran
    Joe, point taken, but given their unusual approaches, under what rough-water circumstance would they do worst than protective equity funds? Looking for some analytic thinking about them like, or in addition to, what DS already posted.
  • expatsp
    Compare RGHVX to VMVAX (Vanguard midcap value) which IMHO should be its benchmark, given its investment style. Certainly RGHVX's 34% drop in 2008 doesn't make its hedging look particularly impressive. Anyway, point is that it underperformed VMVAX since the latter's inception without any less volatility. I know people on this board love the fund, but I don't see it. I think it was Bee who first suggested the comparison to VMVAX, btw.

    That said, a midcap value index fund like VMVAX is probably a pretty damned good core holding.
  • davidrmorandavidrmoran
    edited July 2014
    Thanks much. A good comparison, which I will keep in mind. I just charted those two plus FLPSX, a core holding of mine, from Sept 08 to Dec 11, and actually the 08-09 dip hedging and recovery are superior, although not as much as one might hope, yes. Indeed both RGHVX and FLPSX match or beat VMVAX, but when you continue the graph out to yesterday, RGHVX trails both a little, which match. Thanks, helpful.

    Thoughts on DSENX?
  • jlev
    edited July 2014
    I'm mildly concerned about how the price movement and return on the bonds underpinning DSENX's derivatives affect it's overall return. Until I get a better feel for funds of this format I'm keeping out of it. Philosophically I'm very interested.

    Historically PIMCO has been very successful with the format but looking long term, so I believe Gundlach should be able to achieve similar results. But I'm reluctant to dive in until I understand the different moving parts better. Volatility I understand makes me much less nervous than volatility I don't understand.
  • davidrmorandavidrmoran
    edited July 2014
    Chart its performance against anything since its inception --- the outperformance and the lack of increased volatility, comparatively, are what intrigue me. Don't know other 'funds of this format', guess I should look into Pimco's. Pls post when you understand the moving parts and the engine in toto. I have read their own explanation many times now.
  • jlev
    hmm... Which explanation are you looking at? maybe I've been looking at the wrong ones.

    By "of this format" I mean funds using derivatives for exposure to the index of interest with bonds as collateral. An example from PIMCO would be PCKDX (where I first looked for smallcap exposure) or really any of the stocksPLUS series.
  • AndyJ
    So far, DSENX is high on the list for the U.S. stock exposure in the IRA my spouse plans to open with current 401k assets when she retires in ~ a year. Seems like a good equity discipline, charts well on the downside so far against known risk-averse funds, and the bond sleeve looks roughly to me like a slightly credit-riskier, more non-agency mortgage-heavy DBLFX ... all of which seems pretty attractive.
  • expatsp
    DSENX does look interesting. I wonder if, like PIXDX (which I own in my Roth IRA), it will be highly tax inefficient due to the mix of bonds and derivatives?
  • davidrmorandavidrmoran
    jlev, just these:

    http://www.doubleline.com/shiller-enhanced-cape-overview.php
    http://www.doublelinefunds.com/pdf/DSEEX_Fact_Sheet.pdf
    http://www.doublelinefunds.com/pdf/DSEEX_q114_letter.pdf

    Thanks much for causing me to go study the PLUS series; have been rocking with PDI for many months, at least until recently:)
  • expatsp
    @davidrmoran, please share with us your conclusions when you finish studying the PLUS series in comparison to DSENX. I'm getting tempted to swap PIXDX, part of that series, for DSENX, since I think Gundlach is better than Gross, plus DSENX has a much smaller asset base (which presumably lowers counterparty risk on the derivatives contracts) and a lower expense ratio.
  • davidrmorandavidrmoran
    exp --- gah, I quail when asked for advice, since I mooch here so much and lack confidence financially despite having done okay over the decades (with huge exceptions).

    Anyway, I say yes, absolutely, as I have done, because DSENX since last fall has outperformed the PLUS stuff significantly (meaning enough, meaning nontrivial) and indeed outperformed everything else conservative I own. I may, if I have nerve, go 50-50 with them and RGHVX, as I wrote earlier, with large moneys. But I do not have nerve just yet. I have put a lot into DSENX already, yes, so this is not just theoretical.
  • Brightorange
    edited July 2014
    I just bought this fund and have high hopes for it. One source of good information on the Doubleline Funds is to listen to the online replays and webcasts they produce. There is a replay on this Shiller Enhanced Cape fund that you can download dated May 20th. There is another one coming up on October 21st. The commentator is Jeffrey Sherman on both.

    I usually listen to Doubleline replays and find them very informative.

    Jeffrey Gundlach and Jeffrey Sherman are co-managers.


    http://www.doublelinefunds.com/funds/shiller/overview.html (Barron's webcast)
    http://www.doublelinefunds.com/pdf/DSEEX_Fact_Sheet.pdf
    http://www.doublelinefunds.com/webcasts.html


  • Brightorange
    edited July 2014
    I am sorry, I just realized @davidrmoran has posted some of these links. Try the last one. It has the link to the webcasts. DSENX and DSEEX are the same fund. DSEEX is cheaper, but is institutional and requires a $100,000 initial buy. You can buy it in a Roth IRA for $5000. The transaction fee is $20 at Vanguard.
  • expatsp
    Anyone done any research into the likely tax cost of DSENX/DSEEX? The Pimco Plus funds had massive tax costs (abut 7 p.p. a year according to M*), I imagine because they had to pay capital gains every time they rolled over a profitable derivatives contract. I imagine these funds might have this issue too. Of course, in an IRA that wouldn't matter.
  • Brightorange

    This is an estimated average from my TDAmeritrade site.
    --
    Potential Cap Gains
    Exposure % (3yr avg)
    7.44%
  • davidrmorandavidrmoran
    edited July 2014
    At Fido DSENX is the usual $2500 for anyone / any account, and NTF.
  • expatsp
    It's DSEEX that is the cheaper option, with a 100K minimum...
  • davidrmorandavidrmoran
    Unless there's a transaction fee, as at Fido. Over time of course it's worth it to pay the $50 xaction fee because the ER is much lower, same as with YACKX vs YAFFX.
  • Brightorange
    I corrected the ticker symbol in my post. Thank you, @expatsp.
  • expatsp
    I'm going to do it: swap from PIXDX into DSENX in my Roth IRA. I like the smaller asset base, I like Schiller, and I'd rather get away from Pimco these days. I would still be cautious about this fund if not held in a tax sheltered account. I just don't see how they can avoid capital gains (presuming that they're making money, that is) when they rebalance monthly and also have derivatives contracts rolling over.

    Monthly rebalancing strikes me as too frequent in any case, you lose the momentum effect of sectors which can run for well over a month, but I presume they've done backtesting and this is what appears to work best.

    This is a small % of my portfolio. I wouldn't go all-in to a new fund unless its manager and methodology have a long track record. Gundlach has the track record but I don't think his partner Sherman does. My two cents' worth.
  • davidrmorandavidrmoran
    Thanks much, all. I cannot go all in (or even half in with RGHVX) with something with a track record going back only to last fall. But these postings and queries have been thought-provoking.
Sign In or Register to comment.