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Bought this fund earlier in the year and it's getting killed this year. Any thoughts about the global infrastructure sector in general? I'm really not sure whether to purchase more at this point or sell and write it off as a capital loss. I've never been successful buying sectors and this just reinforces my track record.
I still own BIP (Brookfield Infrastructure) and just reinvest the dividends (another of which I believe comes tomorrow.) That does result in a K-1, though. I own that long-term and don't think about it. I also own pipeline co's. As for TOLLX, the energy aspects are most likely what is dragging down the fund.
There are so many stocks/funds in negative territory and getting worse. I've been through this a number of time in my 40-50 years as an investor. And you know what, I mostly held all the stocks/funds I had because they were some of the best. it was painful but profitable and I was never in a position where I had to sell so that's what I'm doing and so should you. Just keep the cash position available for your needs a year or so.
I own two infrastructure funds TOLLX and PGUAX. At this time, I keeping both and will add to them over time.
Yes, it's a tough spot right now. I thought it would hold up better in a downturn but it seems the opposite happened. I'm trying to figure out why GLFOX cited by BenWP is doing so well this year.
If interested, one can dig through the composition to discover whether this fund is invested as per its name. I have not reviewed the holdings at the home page of this fund.
Thanks, catch22. I just noticed that myself. Also, GLFOX is not as heavily invested in energy per se. I see about 8.5 % whereas TOLLX is about 25%. I'm sure that's part of the difference as well.
Thanks, catch22. I just noticed that myself. Also, GLFOX is not as heavily invested in energy per se. I see about 8.5 % whereas TOLLX is about 25%. I'm sure that's part of the difference as well.
That's probably the core difference - pipeline companies and other such energy infrastructure names have done terribly this year.
Interesting how so many non-traditional sectors and 'alternative' investments have struggled along with the current correction. In the end, and no surprise, cash and short-term bonds have been the true 'safe havens'.
That's their problem correct? Since I have been in the required distribution phase for over 10 years now and no earned income, it does cause a more careful attention to asset allocation.
When I researched infrastructure funds, it seemed that most of them were growth (and energy) oriented. Lazard (coming from a value shop) focuses much more heavily on transportation infrastructure (airports, railroads, etc.). Very different focus (and value oriented).
If you like TOLLX and GLFOX, you can split the difference in a single, cheaper fund, NMFIX. Managed by Lazard and Brookfield. Though I'm stunned that Northern does not disclose the members of Lazard or Brookfield who are responsible for the day-to-day management. (The last time they listed the managers in the prospectus, they were the same as the TOLLX and GLFOX managers.)
I'm going to hang in there for a little while longer with TOLLX to see if it rebounds a little bit before the end of the year. If not, I have a lot of capital gains distributed from other funds already so I can use the loss against those gains if necessary. Good to know about a few alternative funds, though. NMFIX is intriguing.
I believe [unsure] that one difference between (at least the Lazard-managed-portion of the) Northern Trust Fund (NMFIX) is that they don't appear to hedge their currency risk.
I don't believe that there is much currency hedging going on with the Northern fund.
I recall that the directly sold Lazard fund does hedge currency risk. Can others confirm?
The Fact Card for the Lazard fund (Note 1, on back at bottom) notes that the Custom Benchmark for fund is:
The Custom Infrastructure Index (USD Hedge) is the UBS Global 50/50 Infrastructure & Utilities Index (Hedged USD) from inception to March 31, 2015 and the FTSE Developed Core Infrastructure 50/50 100% Hedged to USD Net Tax Index afterwards.
For what it is worth, Deutsche Bank has a very tiny (AUM) ETF that follows the same index as IGF and GII [S&P Global Infrastructure Index], but which hedges currency exposure. Info available here:
The Lazard prospectus does say: "The Investment Manager generally seeks to substantially hedge foreign currency exposure in the Portfolio against movements relative to the US dollar by entering into foreign currency forward contracts, although the Portfolio’s total foreign currency exposure may not be fully hedged at all times."
The Northern Funds (multiple funds described in its prospectus) are allowed but not required to hedge: "Each of the other Funds may enter into forward currency exchange contracts for hedging purposes, in anticipation of the purchase of securities and for liquidity management purposes, but not for speculative purposes or to seek to enhance total return, and are not expected to use these instruments as a principal investment strategy." (p. 74, pdf p. 76)
Another difference is that the Lazard fund is diversified, while the Northern fund is not: Lazard: "Although the Portfolio is classified as “diversified” under the 1940 Act, it may invest in a smaller number of issuers than other, more diversified, investment portfolios."
Northern: "The Fund is classified as non-diversified under the Investment Company Act of 1940, as amended (the “1940 Act”), and may invest more of its assets in fewer issuers than 'diversified' mutual funds."
That is however misleading. Lazard is the more concentrated fund, investing in 30 or so stocks, Northern invests in around 80 (which could simply represent the addition of two portfolios, from Lazard and Brookfield). That seems to be confirmed by M*'s overlap tool. It shows 25 of Lazard's holdings are in the Northern fund, usually at half the concentration. That is, the same ratio, just cut in half since Lazard manages half the Northern fund's assets.
Comments
As a small part of my portfolio I own two infrastructure funds TOLLX and PGUAX. At this time, I keeping both and will add to them over time.
Glad to know you are hanging in there.............
Now, that cash part you noted...no cash position at this house.
We'll survive; but current holdings are indeed subject to change in the next few weeks, if necessary.
Take care,
Catch
Fidelity composition
Note: style map indicates "large value", but investment style per M* indicates sm/mid cap.
If you like TOLLX and GLFOX, you can split the difference in a single, cheaper fund, NMFIX. Managed by Lazard and Brookfield. Though I'm stunned that Northern does not disclose the members of Lazard or Brookfield who are responsible for the day-to-day management. (The last time they listed the managers in the prospectus, they were the same as the TOLLX and GLFOX managers.)
I believe [unsure] that one difference between (at least the Lazard-managed-portion of the) Northern Trust Fund (NMFIX) is that they don't appear to hedge their currency risk.
Suggested by prospectus available here:
https://www.northerntrust.com/documents/prospectuses/individual/prospectus_3708710_statutory.pdf?bc=24061071
and page # 35 of the annual report available here:
https://www.northerntrust.com/documents/annual-reports/mutual-funds/individual/nf_annual_multi_manager.pdf?bc=24061071
I don't believe that there is much currency hedging going on with the Northern fund.
I recall that the directly sold Lazard fund does hedge currency risk. Can others confirm?
The Fact Card for the Lazard fund (Note 1, on back at bottom) notes that the Custom Benchmark for fund is: Fact Card available at right, here:
http://www.lazardnet.com/us/mutual-funds/lfi-open-end-funds/real-assets-portfolios/global-listed-infrastructure/
For what it is worth, Deutsche Bank has a very tiny (AUM) ETF that follows the same index as IGF and GII [S&P Global Infrastructure Index], but which hedges currency exposure. Info available here:
DBIF: http://tinyurl.com/DBIF-GIFund
IGF: http://www.etf.com/IGF
GII: http://www.etf.com/GII
CHART
http://tinyurl.com/dbif-igf-glifx-nmfix
The Northern Funds (multiple funds described in its prospectus) are allowed but not required to hedge: "Each of the other Funds may enter into forward currency exchange contracts for hedging purposes, in anticipation of the purchase of securities and for liquidity management purposes, but not for speculative purposes or to seek to enhance total return, and are not expected to use these instruments as a principal investment strategy." (p. 74, pdf p. 76)
Another difference is that the Lazard fund is diversified, while the Northern fund is not:
Lazard: "Although the Portfolio is classified as “diversified” under the 1940 Act, it may invest in a smaller number of issuers than other, more diversified, investment portfolios."
Northern: "The Fund is classified as non-diversified under the Investment Company Act of 1940, as amended (the “1940 Act”), and may invest more of its assets in fewer issuers than 'diversified'
mutual funds."
That is however misleading. Lazard is the more concentrated fund, investing in 30 or so stocks, Northern invests in around 80 (which could simply represent the addition of two portfolios, from Lazard and Brookfield). That seems to be confirmed by M*'s overlap tool. It shows 25 of Lazard's holdings are in the Northern fund, usually at half the concentration. That is, the same ratio, just cut in half since Lazard manages half the Northern fund's assets.