That's just cuckoo. Same category as MAPOX????? As DODBX??? ICMBX??? JAMBX??? SWOBX???
No way. What I see mostly in DSENX are bonds and swaps. A LOT of them. Clearly, the focus is not to be balanced between equities and bonds as we customarily think of that stuff. (27% equities.) I suppose the very concept is rather unique. Not complaining about Gundlach. Just noting that this niche fund is not like those other animals at all. Except that they all carry ticker symbols.
Comments
I don't disagree that proper categorizing is pretty problematic for this rotating LV fund indexing some value-rotating ETN, but with secret sauce added via debt derivatives. If I have it right. LV seems not so wrong, though Lipper puts it as absolute return.
I am about to move quite a lot of retirement moneys (for me) into it, so that will guarantee it will drop.
Looks like about half stocks and related. How I read 'other', in other words.
See
http://www.thinkadvisor.com/2013/11/22/gundlach-on-shiller-cape-fund-a-better-mousetrap
Value orientation, in other words.
And this for the etn CAPE that DSENX also mimics:
The Index incorporates the principles of long-term investing distilled by Dr. Robert Shiller and expressed through the CAPE (cyclically adjusted price/earnings) Ratio. The index aims to provide notional long exposure to the top four US equity sectors that are relatively undervalued as defined by a modified version of the classic CAPE Ratio and possess relatively stronger price momentum over the prior twelve months. Each US equity sector is represented in the Index by one of the nine S&P Select Sector Indices (the "Sector Indices").
They also throw one sector out per some criterion to avoid value trap; I will try to find exact language. Ah, Fido summary:
It aims to identify undervalued sectors based on a modified CAPE ratio, and then uses a momentum factor to seek to mitigate the effects of potential value traps.
Hence the M* LV designation, or so I infer.
Possibly interesting take of a hatah:
http://www.etf.com/sections/blog/20177-inside-professor-shillers-cape-etn.html
I think Snowball commented recently that the delta over the etn was due chiefly to the bond play.
A key difference between the ETN and the new fund, according to DoubleLine, is that the ETN’s Treasury bill holding is fully exposed to counterparty risk, while the DoubleLine product is protected against such risk through exposure to its fixed-income structure.
Thanks for wishes. I am doing this with quite a bit of trepidation but also conviction, whatever that means.
I was late to the party also, but learned about it here and dove in, or slowly slid in.
One finds bond houses try to mimic equity funds by use of bonds and derivatives. The concept is not unique. The bond houses are simply leveraging their expertise in bonds. Such funds do get classified in the same group as the equity funds they're mimicking.
For example, Met West AlphaTrack 500 (MWATX) - you can guess what this fund is mimicking. Classified Large Cap Blend (M*) and Large Cap Core (Lipper). 70% bond, 30% cash. From its prospectus Or you may be more familiar with PIMCO StocksPlus (PSPDX among a zillion other tickers). M* writes: Same as MetWest.
I was hoping you would chime in, but more dummy-explain the secret sauces.
(Also meaning I won't be readily able to analyze my overall portfolio allocations.)
This whole thread started with acknowledgment of it as LV, yes. I mean, check out the CAPE index it attempts to surpass.
Click onto the the green/red icon at the far left end of the 350 day slider for a bar graph representation of the returns.
For a simple example of how derivatives expose this problem, consider structured investments like index-linked CDs. (An issuer of index-linked vehicles often constructs them by buying zeros to protect principal and then investing the remaining cash in index call options. Each of these investments is a derivative.)
These are CDs - insured (no risk of loss), issued by banks. Looking at them as CDs one would them "cash". But looking at how they fit into one's asset allocation (how they behave), one might better consider them equities.
Now, make a minor tweak - instead of an index-linked CD, consider an indexed linked note, perhaps (but not necessarily) an ETN. Same return, but now has issuer risk, reflecting the fact that it is a promise of payment by a company. The actual vehicle is a bond, but in terms of asset allocation, it fits into one's portfolio as equity.
One begins to see the difficulties in classifying something that is based on derivatives.
Return to my problem statement - classification by behaviour vs. classification by actual assets. M* classifies investments by their behavior - otherwise (IMHO) all ETNs would wind up classified as bonds. So M* classifies CASE as LV (equity), not as a bond.
But M*'s X-ray does what the name implies - it "xray's" investments to see what they hold. ETNs are opaque, so M* shows nothing. (0% of its holdings are reported.) In contrast, DSENX is transparent, so X-Ray shows what it actually holds, not how it behaves. The tool is doing what it is defined (and designed) to do.
Derivatives by design transform behaviour - so that what shows up as actual holdings does not match the behavior of the overall portfolio. Pretty much by definition.
If M* or others would state " Dude, you do not know what you own,' in violation of investing rule 3".......tell them you are strictly a price trend investor. You will hear silence, eh?