@Junkster,
Before the Triple Decker PB sandwich season and Appalachian trail pull you away from the website I wondered if you would indulge us on what your fund choices would be for High Yield Bond Funds (for income) long term (buy & hold)? I realize this goes against all that you hold sacred since "tight trailing stops" is your middle name, but if you had to stick with a few funds long term which would you select?
Thanks
Comments
If I could I would be in BXIYX a hybrid junk and bank loan fund or if I wanted a pure junk fund BXHYX. These are both Barings Global funds. They aren't available at Scottrade. Their bank loan fund - BXFYX - is however and I hold that and have been more than happy with its performance the past 6 months.
Edit: Even though I am trading less than ever I would never hold any of these funds for the long term. It's just they have been in such tight rising channels no need to do anything. As for junk bonds, according to Fitch, the default rate is predicted to drop considerably by year end 2017. I can't find that link right now though.
Edit #2 Actually I can answer about a good long term hold in junkland. PRHYX. I put an old girlfriend in that fund in early 1992 and she still holds it and thanks me every time we talk. Not all that much less of a return than the S&P but with a heck of a lot less volatility along the way.
Oil And Gas 18.03%
http://www.barings.com/funds/closed-end-funds/barings-global-short-duration-high-yield-fund
I have a small position here.I think the fund has a good manager.
HYOAX
https://az768132.vo.msecnd.net/documents/22438_2017_01_20_08_08_21_867.gzip.pdf
@Junkster said, I put an old girlfriend in that fund in early 1992 and she still holds it and thanks me every time we talk
I'm guessing you get a lot of Valentine's wishes.Thanks for all your wisdom over the years.
Here is one of Ted's sources ... US News ... High Yield Bond Funds
http://money.usnews.com/funds/mutual-funds/rankings/high-yield-bond
For me, I am looking at convertibles.
Skeet
I also wonder if pairing OSTIX with a few other great bond funds would be another approach. Having a list of great bond funds is always helpful when diversifying a portfolio.
We are all told that holding individual bonds to maturity returns principal plus the coupon (outside of a default or haircut risk I would assume). I can imagine a low turnover, well managed (from default risk) bond fund coming pretty close to that scenario. The bond fund value will take a hit in a downturn, but so would an individual bond holding if sold during that downturn. The idea here is, as @Junkster points out, 25 years later his old girlfriend still wants to take him out to dinner. O.K. that might be a bit rich for Junkster's dietary requirements, maybe at least oatmeal at a diner.
Thanks @davidmoran with your choice FAGIX. I first heard of this fund from @Catch22. Great choice.
@Art, BUFHX is another good option. Could someone explain why most Buffalo Funds have an ER of 1.01% (probably my only knock). Could someone tell them .99% looks a hell of a lot cheaper.
No one yet has mentioned AGDYX (M*****,Bronze) which seems to be the out performer to many of the other recommendations made so far. Any opinions on AGDYX? HYB has also outperformed other HY bond fund compared below over the last 10 years.
HY Bonds (mentioned in this thread) over the last 17 years:
I am not a fan of Larry Swedroe he of the managed futures funds and the interval funds where you don't have ready access to your funds. But I can see his point where junk bonds are a *flawed* investment. And that is because they are too correlated to equities and hence why not just hold the later.
The reason I *trade* junk corporate, junk muni, and bank loan mutual funds is because when they are in bull phases they are the most trend persistent low volatility things out there. That way I can trade them with 100% of my capital something I can't do with more volatile instruments. I am obsessive compulsive about losing and drawdowns. In the 90s where it was a straight up market I was just as obsessive but traded sector equity funds in the same way I now trade the bonds.
You noted: "OSTIX comes as close to buy-and-hold as any. Although it is not a high-yield fund, that is where M* puts it. It's downside protection is evident from its 2008 return vs the pure HY funds. I would not even want to own a pure HY fund because of this."
>>>My personal view of this fund from its current composition is a short-term high yield bond fund with a touch of AAA bond holdings and some form of "cash". My recall is during 2012 the composition of this fund moved away from a more diverse multi-sector bond fund. I do not have access to its composition from prior years. As to it being moved to HY within M*, they didn't have a "slot" to match, eh? OR that if most of the fund was moving to HY beginning in 2012, the proper slot may be appropriate.
For those wandering into this discussion and not familiar with prior years, I must presume that the downside protection you indicate in 2008 was from the fund having little exposure to HY bonds during most of or at the least during the last half of 2008.
From the current prospectus:
The Osterweis Strategic Income Fund invests primarily in income bearing securities. Osterweis Capital Management, LLC (the “Adviser”) takes a strategic approach and may invest in a wide array of fixed income securities of various credit qualities (e.g., investment grade or non-investment grade) and maturities (e.g., long term, immediate or short term). The Adviser seeks to control risk through rigorous credit analysis, economic analysis, interest rate forecasts and sector trend review, and is not constrained by any particular duration or credit quality targets. The Fund’s fixed income investments may include, but are not limited to, U.S. Federal and Agency obligations, investment grade corporate debt, domestic high yield debt or “junk bonds” (higher-risk, lower-rated fixed income securities such as those rated lower than BBB- by S&P or lower than Baa3 by Moody’s), floating-rate debt, convertible debt, collateralized debt, municipal debt, foreign debt (including emerging markets) and/or depositary receipts and preferred stock. The Fund may invest up to 100% of its net assets in dividend-paying equities of companies of any size – large, medium and small. Additionally, the Fund may also invest up to 100% of its assets in foreign debt (including emerging markets) and/or depositary receipts. The Fund’s investments in any one sector may exceed 25% of its net assets. The Fund’s allocation among various fixed income securities is based on the portfolio managers’ assessment of opportunities for total return relative to the risk of each type of investment.
As to M* categories in general. We all know not every fund will have a proper fit. Not unlike, FAGIX ; which is listed as a high yield bond fund. To the point of holding about 80% of the portfolio with HY bonds, this fund also usually has about 20% in equity and to further blend the mix; 15-20% of the total mix is also non-U.S.
FRIFX is another "stray" fund. Its performance will never show properly against the real estate category, as this fund maintains about a 50% mix of real estate related equity and bonds.
End of 2016 composition, OSTIX
The below is relative to the really nasty market melt period. Click onto OSTIX for the chart.
OSTIX SPHIX IEF Sept 11, 2008 thru Dec 18, 2008
Disclosure: our house is not invested in this fund
Anyone know how to find this funds holdings during 2008?
Regards,
Catch
http://seekingalpha.com/article/4041447-time-rotate-high-yield-cefs?uprof=46&isDirectRoadblock=false
Not sure who you are asking about this fund. I will note that this may indeed be an institutional offering.
I find very little info available, except past performance (the past 5 years put this fund near the top of the list) for category. The summary prospectus doesn't offer the normal data for a retail investor.
Are you able to purchase this fund?
Regards,
Catch
Try including the "@" symbol and then the member name such as @MikeM2 or @Junkster. This will flag your comment with the member and might get a quicker response.
NHMAX - load free at Fidelity.
"So let’s get into my particular style of trading. It may well not be anyone’s cup of tea and that suits me just fine. First off you have to know I have an extreme aversion to risk. Such an aversion that some could argue I had no business whatsoever trying to make it as a trader. So to compensate for my risk aversion I developed a methodology that eliminates risk and volatility as much as possible. I realize the academics might say otherwise, but to me volatility *is* risk. Unlike most traders who thrive on volatility, it is my enemy. My primary goal as a trader is to NOT lose or as little as possible. To cut my losses in the blink of an aye. To not think/analyse - just react when price moves against me.
Once I changed my mindset back in the spring of 1985, my goal was to make money every month. A goal that has remained my primary constant to this very day. I could best achieve that goal by low risk, yet consistently profitable strategies. Hitting singles and doubles and then using the compound effect to accumulate wealth over the years.
For me, profitable low risk trading and consistently compounding my capital over time can be summarized in three words - TIGHT RISING CHANNELS. Tight rising channels have little to no volatility. With the tight rising channel pattern and its inherent low volatility that enables me to deploy (in increments) 100% of my nest egg. So what does a tight rising channel look like. It looks much like my equity curves as previously shown in this update of my futures trading and my mutual fund trading.
You may wonder how I handled tight rising channels while day trading stock index futures - an asset class notorious for its wild intraday swings. What I did was uncover three particular early morning patterns which more often than not led to later day tight rising channels in the futures. I uncovered these patterns from my constant monitoring of the market and the stock index futures via the CNBC tape. Unfortunately the CNBC tape nowadays is a different animal of that back in the 80s and 90s.
I have discussed these day trading patterns ad nauseam in books, magazine articles, and seminars so no need to go into detail on them here. Plus, I overlayed these patterns with a host of indicators, primarily sentiment, on whether or not to take the trade. That is where the art of trading came into play. These patterns were such that I traded maybe 3 or 4 times a week at best.
While consistently profitable as a part time day trader, because of my aversion to risk I was unable to ever trade more than one contract. The stock index futures are leveraged vehicles and leverage can be a killer. My monthly profits were a very modest and mundane $716 a month over a 122 month period. I had other part time employment which paid the bills. This enabled me to roll my day trading profits into the trading of mutual funds. That is where I made my real money as a trader. In fact, there were two monthly periods where I made more money in the funds than the entire 122 months I day traded the stock index futures.
So why mutual funds? Primarily because since they are diversified with a large number of holdings, they are more prone to tight rising channels when they are in uptrends. Secondarily, everyone trades the futures, options, and individual equities, while very few trade mutual funds. That alone, not following the trading herd, is reason enough for me. My entire life I have never been a follower or into grouthink. So I would like to believe that streak of independence is also what led me into the trading of mutual funds.
In the 90s, I was focused most on trading sector funds - technology, healthcare, leisure, etc. as well as small cap growth funds. While Fidelity had a host of sector funds, they also imposed short term trading fees. That led me to INVESCO which also had several sector funds and where there were no fees for in and out trading. I also had a trading account at the now defunct Strong Investments.
I believe a large part of anyone’s success has an element of luck - being in the right place a the right time. I could not have been any luckier than having my accounts at INVESCO and Strong. I could trade free of any commissions and fees and as often as I wanted. I fully participated in the new fund effect back in those days being that both firms brought new funds to the market frequently. I could also dateline international funds whenever the datelining pattern occurred.
Datelining and the constant in and out trading without fees are now a thing of the past. But I adjusted. As my account grew over time, my aversion to risk became even more extreme. That led me to the trading of bond mutual funds, more specifically high yield corporates, high yield munis, and floating rate. This was an easy transition as junk bonds had always been my one true love in the financial arena dating back to the early 90s when I began trading them along with the sector funds. The bond funds were custom made for me because they had even tighter rising channels due to even less volatility. So it was much easier to deploy 100% of my trading capital there."























He is not an adviser. And that is a good thing. He is honest. He isn't trying to get you to buy a newsletter.
Nicely written; and, most of all you pratice your mythology as well. Very genuine indeed.
Skeet
https://www.invesco.com/pdf/HYBRR-FLY-1.pdf
http://news.morningstar.com/classroom2/course.asp?docId=5401&page=4
http://blogs.barrons.com/incomeinvesting/2016/04/12/surprising-strategy-for-high-yield-go-down-in-quality-if-rates-rise/