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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.

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ZEOIX mixed?

I was looking at the MultiSearch and Dashboard results for ZEOIX. After consulting their website (ZEO now has a real website) ZEOIX looks like a superior mattress to me. (that's a compliment). What puzzled me on the Premium toosl was the characterization of David's take on this fund as "mixed". It was actually Chip's take but that's fine. I just can't find anything mixed in the 2014 description of this fund. It look entirely positive. Have I missed a subtly stated reservation? (other than saying this fund is not for everyone. But neither is RPHYX, with a "positive take". )


  • @Ben & MFO Members: ZEOIX is a traditional turkey that will be served up next Thursday. This fund is a ZERO !
  • It is a better mattress and is intended for that purpose. It's a holding tank with low chance of losing principal and just a bit of gain. I suggest looking at the ZEO website and Chip's writeup before dismissing it.
  • I see pluses and minuses for the fund. I looked at it a couple years ago in my IRA and decided it wasn't worth the cost, high exp. ratio and TF at Schwab. If you are using it as a "superior mattress fund" outside a brokerage, wouldn't buying a 5 year CD be even more comfy thean that mattress fund? CD's make about the same yearly return and (IM<HO) CD's have no place to go but up. HY bonds, even very short term, you can't guarantee the same. In fact down is more likely.

    You won't get very good CD or money market rates at a brokerage, so if that's the case ZEOIX may be a good option. But if you are talking money that has more options, money that you want to stash in a safe place, I wouldn't go there. I'd start looking at CD's.
  • Ted said:

    @Ben & MFO Members: ZEOIX is a traditional turkey that will be served up next Thursday. This fund is a ZERO !

    Ted, As you know, some of us use ZEOIX as a relatively stable value higher yielding money market alternative. What would you recommend as a replacement?
  • Though I'm not "Ted".....FWIW........ I use GILPX and ASDIX for quasi-cash (low risk, low duration and low-return) vehicles. Even more conserative allocations go to TRBUX and MINT.

    Going up the ladder, I use SEMPX and SPFPX for more risk and more yield.

    I choose these vehicles based on their lack of volatility, but by no means are any of them cash or Money Market substitutes. They all can lose money on occasion.
  • Well, Zero and Zeo are similar sounds. If R stands for Return then Zeo, lacking an R sure enough is not impressive in the R department. But ZEOIX is not for accumulating wealth.

    BTW, why go with a brokerage when you can go directly to the fund transfer agent and pay no fee?

    As for CD rates even at 6 years I don't see anything right now quite as "high" as ZEOIX's modest returns. In a mutual fund the money is liquid. But yeah, CDs are likely to go up. But meanwhile......

    I appreciate everyone's opinion, including Ted's, even though I think I disagree about this fund's turkeyness. Thanks for chiming in. However my real question is "why is Chips's 2014 evaluation described by MFO as "mixed"?
  • @Ben & MFO Members: Look at LALDX !
  • According to MS, ZEOIX beats LALDX over every time frame (note the info for the LW version for LALDX was unavailable when I looked).
  • I'm still haunted by what happened to many money-market plus / ultra-short bond funds in 2008. By pure luck, I didn't lose anything then (I sold my Schwab ultra-short bond, just before it cratered, because I needed the cash) but these all make me nervous. I do own RPHYX since David's write-up convinced me it is truly different from other ultra-short junk funds. ZEOIX looks more typical. I'd feel better if it had a record that extended back through 2008.
  • As far as the CD - ZEOIX comparison, ZEOIX has averaged about 3% return over the last 5 years, 2.8% over the last 3. You can now get a CD through Goldman Sachs Bank at 2.4%. Personally, if you are working outside a brokerage, I would ladder 5 year CDs as opposed to owning ZEOIX, but to each their own.
  • @MFO: A ZEOIX by any other name would smell just like another high-yield bond fund, a far cry from a money market fund ! It has lag the average high-yield bond fund, YTD, 1-5 Yrs., has an extremely high ER and below average yield. So once again, I 'm sticking it in the over for Thanksgiving Day turkey !
  • edited November 2017
    ZEOIX has done precisely what I tasked it to do...serve as a low risk bucket one holding, essentially cash-like, but also to ideally earn 2-3% a year in a no-drama fashion. And, it actually is the best performing of the 5 funds similarly tasked.

    Ted, the problem you're making in your analysis is to compare this against a pool of high-yield bond funds...the same mistake that MS makes, and which has been discussed more than once in the MFO commentary.
  • @PRESSmUP: If your happy with ZEOIX, that's just fine with me, after all its your money not mine. Enjoyed the discussion !
  • Ted, (et al) have you read Chip's writeup on ZEOIX? Really my question is about that, not directly about the fund. Thanks everyone for chiming in. It's all lively, all pertinent, although not really what I asked about. What I asked is : what in her report could be called "mixed"?
  • No money in any of the funds mentioned; but curious as to total returns.
    The time frame is from May 31, 2011 to current date.,LALDX,RPHYX&n=1627&O=011000
  • Ben said:

    Ted, (et al) have you read Chip's writeup on ZEOIX? Really my question is about that, not directly about the fund. Thanks everyone for chiming in. It's all lively, all pertinent, although not really what I asked about. What I asked is : what in her report could be called "mixed"?

    Can you link Chip's writeup you are referring to? Thanks
  • Hi Ben. I'm afraid I am the culprit here. I read each of David's profiles and make an "objective" assessment. At the time, he mentioned a few dings, which influenced my assessment. If I recall, here are some of the statements:

    Management’s stake in the fund

    As of the last Statement of Additional Information (April 2013), Mr. Reddy and Mr. Cook each had between $1 – 10,000 invested in the fund. The manager’s commitment is vastly greater than that outdated stat reveals. Effectively all of his personal capital is tied up in the fund or Zeo Capital’s fund operations. None of the fund’s directors had any investment in it. That’s no particular indictment of the fund since the directors had no investment in any of the 98 funds they oversaw.

    Expense ratio

    The reported expense ratio is 1.50% which substantially overstates the expenses current investors are likely to encounter.

    Fund website

    Effectively none. contains the same information you’d find on a business card. (Yeah, I know.) Because most of their investors come through referrals and personal interactions it’s not a really high priority for them. They aspire to a nicely minimalist site at some point in the foreseeable future. Until then you’re best off calling and chatting with them.

    Break, break.

    Venk and Paige were kind enough to provide an update via telecom last month and after discussion with David, we're trying to set-up a visit with them in mid December for a profile update in January commentary.

    Since 2014, they've doubled in AUM ... much better website now, lower er (if not low enough), not sure of director stake yet. But, in any case, they remain genuinely thoughtful in approach to investing and investor solicitation.

    Here are some of their impressive risk numbers (click screen to enlarge):

  • Thanks, Charles! Yup, it was those impressive risk numbers that got my attention.
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