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
Replacement for RSIVX Multi sector bond fund. in a Roth ira fund purchased about a year ago.
Disappointed in RISVX PERFORMANCE-- YR. TO DATE =MINUS 1.67 % -- 12 MONTHS = DOWN 1.70 % -- EXPENSE RATIO =1.24 % I'am aware from M* 'QUICK RANK' TOOL OF A NUMBER OF MSB Funds that are in the BLACK for the same time frames, and with lower.ER However, I would appreciate any suggestions & advice from the pros here @ MFO. Thanks Ralph
I wouldn't think of RSIVX as a multi-sector bond fund, even though M* puts it there (IMO, incorrectly). [If it is multi-sector, then where are the sectors (PLURAL) that you see, M*? All I see is elevated cash and corp bonds, most of them being below investment-grade.... sort of like OSTIX, which you list as HY, and which has an even lower duration than RSIVX]. Viewed as a short-intermediate HY bond fund, I think its YTD performance would still rate a middle-range disappointment.
@Ralph If you aren't incredibly yield-hungry, are more of a total return kinda guy for this one, and are looking for something more in line with what you thought you'd be getting with RSIVX, I'd take a serious look at what willmatt72 suggested with ASHDX (if you can get the D class in your Roth). The lead manager, Douglas Forsyth, has taken on some additional administrative duties recently, but everything he has done at Alliance has turned out very well for investors for quite some time.
For comparative purposes, go to this Compare graph from the Fidelity site I have set up for you, and fiddle with the YTD and 1 yr performance. You might find the results interesting/helpful. If you have other funds in mind and want to remove one on the list, simply click the big X next to the one you wish to vanquish, then enter your new one in the Add Symbol window. [remember to click on the various Tabs; a lot of additional info there] https://www.fidelity.com/fund-screener/compare.shtml#!&fIds=RSIVX,ARTFX,PRHYX,ASHDX,OSTIX&tab=ic
The strategic income bond fund moniker probably ought to be outlawed - as it tends more to obfuscate than enlighten. That term can refer to a wide variety of approaches. As heezsafe notes, this fund invests largely in lower quality bonds rated BBB and below. While BBB technically denotes investment grade, these are considered "speculative" - having some characteristics of investment grade and some of non-investment grade. The holdings in AAA (likely U.S. government backed) is designed to hedge against the risks of all those lower rated bonds. That's probably where the strategic part of the name originates.
Andy's link (below) puts the non-investment grade portion at 68%.The 1.24% ER is a tad high - but not unusual for funds investing in lower rated bonds. Apparently, more intensive research is required on the manager's part.
I don't have any wisdom to offer or bone to pick here. Like Ralph I've chosen to hold a substantial amount of income producing assets in my older Roth IRA - seeking to protect some of the big gains from equities following the '07-'09 meltdown. FWIW, these 3 have filled the bill for me: RPSIX, DODIX, DODLX. (The last one has fared even worse, however, than RSVIX, being exposed to international bonds.). If I were to recommend one to Ralph it would be RPSIX - along with a healthy dose of patience!
(Earlier posted bond quality ratings removed per Andy's helpful note below.)
I hold RPHYX rather than RSVIX, but similarly disappointed at performance versus similar funds such as ZEOIX. I am waiting for their 3rd Quarter commentary to (hopefully) get some clarity as to what has happened to these funds' NAV and what to expect going forward. Should be posted here when available: http://www.riverparkfunds.com/Funds/ShortTermHighYield/Commentary.aspx
Hi Hank, I don't know what M* page you were copying from as far as the RSIVX credit quality breakdown goes, but here are the figures from the page that's on the site now, with data as of 9/30.
In round #s, all of the A categories (AAA-AA-A) = 3%, BBB = 21%, BB = 3%, B = 51%, < B = 14%, NR = 9%. The average quality per M* is B, which is what D. Sherman said it would be at the launch of the fund.
So overall, it's ~ 24% IG (with most of that at the lower end of IG), 68% non-IG, and 9% unrated.
That 68% non-investment grade you cite pretty much makes it a junk bond fund.
Sorry. I saved the link before cutting and pasting, but when I went back just now to pull it up again, it came back "currently not available." So ... I guess it was a dated link. (It came up during a Google search.)
PS - The flaw could have been in my cut & paste. I note they also give a "category average" which looks suspiciously like what I listed. I'll correct the post.
Thought it must have been something like that, Hank. Yep, it's pretty much a short duration high yield fund, and junk has been out of favor (putting it at a disadvantage to its M* peers in MS*), but even so, Riverpark hasn't kept up with its real peers, e.g., ASHDX & OSTIX.
* As heezsafe said, there's not much "multi" about it.
As Heezsafe alluded to, RSIVX is not really a total return fund. I held this fund for about a year and, while it distributed a nice dividend, it never held its NAV during that time. As a result, I continued to watch my principal drop. It wasn't my cup of tea. I chalk it up to lessons learned. I've had better results with ASHDX and ZEOIX.
Same experience and thoughts as @willmatt72.Haven't pulled plug yet but when I do I'll keep this fund @ the top of my replacement list. Performance Trust Strategic Bond PTIAX
You guys are a tough audience. According to M*, RSIVX is a whopping 1.6% behind its benchmark over the last year. Any fund with a 6% yield is going to have some volatility.
I remember in David's original write up that the manager's promise was to deliver 6-8% yield and more or less stable capital over a five year cycle. It seems to me he's on his way to meet that goal.
But if stable capital is what you want on a daily or even monthly basis, you should certainly be elsewhere.
None of this is to say that there might not be better bond funds out there, and the ones listed here look good (PTIAX -- wow!) but I personally am giving RSIVX more of a chance.
M* has problems in how it classifies bond funds. We all know that. So, a Roth IRA is often an account that is the most aggressively allocated, since there is no RMD. If you actually want bonds in the account, do you really care about short-term fluctuations over a 20-30 year time horizon? Understand that few current managers will likely be with any fund you pick for that time horizon. Maybe you just pick something like VBMFX or WOBDX that are Core Bond funds.
Umm ... Re "purchased about a year ago". I may have missed that tidbit in your caption earlier.
If, as it sounds, the Roth itself was opened only a year ago, I'd wonder why one would invest a new Roth IRA in bonds in the first place?
Just a personal observation, but generally speaking a Roth should be positioned for growth. Bonds are currently yielding very low historical returns. The 10-year Treasury yields about 2%. Subtract management fees and one can only expect a 1-2% return on investment going forward (somewhat more with lower rated bonds).
There are, however, a few reasons for holding bonds in a Roth IRA.
--- #1 Age
--- #2 Seeking to protect outsized gains already earned inside a Roth that was originally invested in undervalued assets
--- #3 Estate planning
--- #4 As a smaller portion of a broad-based investment approach
--- #5 Tactically - while awaiting an expected buying opportunity later after an anticipated equity correction (This last one, however, is a bit suspect because markets are very difficult to predict.)
In addition to the above, some individuals are simply uncomfortable taking risks in the markets and don't tolerate wide fluctuations in value very well. For those investors, conservative multi-asset income funds may be the right choice. As the prior discussion illuminates, RVSIX is hardly multi-asset in composition.
Since I bought in for #5 above and early enough that I am still (barely) positive, I empathize with Ralph. The money I took out in anticipation of a correction big enough to invest in has retained more value than the fund. (Correction wasn't big enough to buy into.) Agree in retrospect with those who think this fund will move with junk bond funds and equities, but Sherman sounded so confident... Guess I'll sell before I'm negative.
@expatsp said: "You guys are a tough audience. According to M*, RSIVX is a whopping 1.6% behind its benchmark over the last year. Any fund with a 6% yield is going to have some volatility. I remember in David's original write up that the manager's promise was to deliver 6-8% yield and more or less stable capital over a five year cycle. It seems to me he's on his way to meet that goal."
I agree. But, it will be interesting to read the 3rd quarter commentary to get David Sherman's take on the fund's recent performance.
Also, I agree with expatsp that PTIAX looks interesting (thanks to @TSP_Transfer ) . It's current investment mix appears to make it a "hybrid high yield fund" (to invent another category). M* says the fund has about 40% in municipal bonds and B as the average credit quality. Successfully blending those two types of bonds in one fund could serve to even out year to year performance. I wonder what other funds do that?
Thanks to all for your comments & suggestions.I'm looking @ each fund recomendation The following is a copy/paste from my comments earlier today. concerning risvx.
---RISVX - down 4.18% -- for 2015-- including re invested div. & cap gain. I.m still holding while looking for a replacement, Vanguard to launch " core bond fund" in March 2016, so I'll hang on to risvx till then.
Comments
For alternatives, see other funds mentioned here:
http://www.mutualfundobserver.com/discuss/discussion/comment/67243/#Comment_67243
For recent discussion, see:
http://www.mutualfundobserver.com/discuss/discussion/22813/nathan-s-famous-hot-dogs-and-rsivx#latest
@Ralph If you aren't incredibly yield-hungry, are more of a total return kinda guy for this one, and are looking for something more in line with what you thought you'd be getting with RSIVX, I'd take a serious look at what willmatt72 suggested with ASHDX (if you can get the D class in your Roth). The lead manager, Douglas Forsyth, has taken on some additional administrative duties recently, but everything he has done at Alliance has turned out very well for investors for quite some time.
For comparative purposes, go to this Compare graph from the Fidelity site I have set up for you, and fiddle with the YTD and 1 yr performance. You might find the results interesting/helpful. If you have other funds in mind and want to remove one on the list, simply click the big X next to the one you wish to vanquish, then enter your new one in the Add Symbol window. [remember to click on the various Tabs; a lot of additional info there]
https://www.fidelity.com/fund-screener/compare.shtml#!&fIds=RSIVX,ARTFX,PRHYX,ASHDX,OSTIX&tab=ic
Andy's link (below) puts the non-investment grade portion at 68%.The 1.24% ER is a tad high - but not unusual for funds investing in lower rated bonds. Apparently, more intensive research is required on the manager's part.
I don't have any wisdom to offer or bone to pick here. Like Ralph I've chosen to hold a substantial amount of income producing assets in my older Roth IRA - seeking to protect some of the big gains from equities following the '07-'09 meltdown. FWIW, these 3 have filled the bill for me: RPSIX, DODIX, DODLX. (The last one has fared even worse, however, than RSVIX, being exposed to international bonds.). If I were to recommend one to Ralph it would be RPSIX - along with a healthy dose of patience!
(Earlier posted bond quality ratings removed per Andy's helpful note below.)
In round #s, all of the A categories (AAA-AA-A) = 3%, BBB = 21%, BB = 3%, B = 51%, < B = 14%, NR = 9%. The average quality per M* is B, which is what D. Sherman said it would be at the launch of the fund.
So overall, it's ~ 24% IG (with most of that at the lower end of IG), 68% non-IG, and 9% unrated.
That 68% non-investment grade you cite pretty much makes it a junk bond fund.
Sorry. I saved the link before cutting and pasting, but when I went back just now to pull it up again, it came back "currently not available." So ... I guess it was a dated link.
(It came up during a Google search.)
PS - The flaw could have been in my cut & paste. I note they also give a "category average" which looks suspiciously like what I listed. I'll correct the post.
* As heezsafe said, there's not much "multi" about it.
Performance Trust Strategic Bond PTIAX
http://www.ptiafunds.com/images/website/documents/fund-documents/ptiax_factsheet.pdf
Taper Tantrum May -Aug 2013*
http://www.ptiafunds.com/images/website/documents/fund-documents/ptiax_dividend.pdf
I remember in David's original write up that the manager's promise was to deliver 6-8% yield and more or less stable capital over a five year cycle. It seems to me he's on his way to meet that goal.
But if stable capital is what you want on a daily or even monthly basis, you should certainly be elsewhere.
None of this is to say that there might not be better bond funds out there, and the ones listed here look good (PTIAX -- wow!) but I personally am giving RSIVX more of a chance.
If, as it sounds, the Roth itself was opened only a year ago, I'd wonder why one would invest a new Roth IRA in bonds in the first place?
Just a personal observation, but generally speaking a Roth should be positioned for growth. Bonds are currently yielding very low historical returns. The 10-year Treasury yields about 2%. Subtract management fees and one can only expect a 1-2% return on investment going forward (somewhat more with lower rated bonds).
There are, however, a few reasons for holding bonds in a Roth IRA.
--- #1 Age
--- #2 Seeking to protect outsized gains already earned inside a Roth that was originally invested in undervalued assets
--- #3 Estate planning
--- #4 As a smaller portion of a broad-based investment approach
--- #5 Tactically - while awaiting an expected buying opportunity later after an anticipated equity correction
(This last one, however, is a bit suspect because markets are very difficult to predict.)
In addition to the above, some individuals are simply uncomfortable taking risks in the markets and don't tolerate wide fluctuations in value very well. For those investors, conservative multi-asset income funds may be the right choice. As the prior discussion illuminates, RVSIX is hardly multi-asset in composition.
Agree in retrospect with those who think this fund will move with junk bond funds and equities, but Sherman sounded so confident...
Guess I'll sell before I'm negative.
http://www.riverparkfunds.com/downloads/FactSheet/RiverPark_Strategic-Income-Fund_Fact-Sheet.pdf (see the pie)
vs.
http://portfolios.morningstar.com/fund/summary?t=RSIVX®ion=usa&culture=en_US
8% cash, or 20% cash-- you decide.
B= 32%, or 50.5?-- you decide.
<B= 23%, or 14.4%-- you decide.
Not rated? 12%, or 8.5%-- you decide.
'cause hell if I can tell you which figures are the correct ones...... whatever, I guess......
I agree. But, it will be interesting to read the 3rd quarter commentary to get David Sherman's take on the fund's recent performance.
Also, I agree with expatsp that PTIAX looks interesting (thanks to @TSP_Transfer ) . It's current investment mix appears to make it a "hybrid high yield fund" (to invent another category). M* says the fund has about 40% in municipal bonds and B as the average credit quality. Successfully blending those two types of bonds in one fund could serve to even out year to year performance. I wonder what other funds do that?
Here is the three year chart:
Chart
The following is a copy/paste from my comments earlier today. concerning risvx.
---RISVX - down 4.18% -- for 2015-- including re invested div. & cap gain.
I.m still holding while looking for a replacement, Vanguard to launch " core bond fund"
in March 2016, so I'll hang on to risvx till then.