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Post by archer on Nov 24, 2023 22:54:44 GMT
In the Don't Mess With it Very Often sleeve of my PF I hold mostly 2 funds FBALX and FMSDX. I think FMSDX has faltered for too many months and am considering replacing it. For 3 years now its Sharpe ratio has been poor and this includes both up and down market years.
Back testing over the same time periods beat both of the above allocation funds not only in Sharpe but lower SD and greater returns with 50/50 SPY/FFRHX
So my question is as we approach a likely leveling and lowering of interest rates, how will bank loan funds perform with their short duration compared to longer duration bond fund possibilities?
Is there anything particular to bank loan funds that would mitigate the short duration vs declining interest rate equation? If not, it seems I am probably late to make the move above.
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Post by FD1000 on Nov 24, 2023 23:35:47 GMT
archer , "So my question is as we approach a likely leveling and lowering of interest rates, how will bank loan funds perform with their short duration compared to longer duration bond fund possibilities? " FD: you know the answer. Rates go down = LT duration funds will do better. I can answer your other questions, but you know what I do already, see an example ( big-bang-investors.proboards.com/post/44267).
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Post by yogibearbull on Nov 25, 2023 0:47:37 GMT
There are now 3 kinds of FR funds - Treasury FRNs, corporate FRs, and junky FRs/BLs. Posters here talk mostly about the 3rd type and those have done well recently. But they won't do as well when the rates go down (some day) - then their floating feature becomes useless and they act just like any other ST-HY. So, they may have some kick left still, but don't rely on years of PV Backtesting for junky FR/BL. Normally, PV Backtesting is a useful tool, but not for things such as FR/BL.
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Post by archer on Nov 25, 2023 4:50:16 GMT
archer , "So my question is as we approach a likely leveling and lowering of interest rates, how will bank loan funds perform with their short duration compared to longer duration bond fund possibilities? " FD: you know the answer. Rates go down = LT duration funds will do better. I can answer your other questions, but you know what I do already, see an example ( big-bang-investors.proboards.com/post/44267). Earlier today I read your Fidelity screening process to refresh my memory and that's how I found FFRHX as the bond component.
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Post by FD1000 on Nov 25, 2023 5:22:38 GMT
archer , "So my question is as we approach a likely leveling and lowering of interest rates, how will bank loan funds perform with their short duration compared to longer duration bond fund possibilities? " FD: you know the answer. Rates go down = LT duration funds will do better. I can answer your other questions, but you know what I do already, see an example ( big-bang-investors.proboards.com/post/44267). Earlier today I read your Fidelity screening process to refresh my memory and that's how I found FFRHX as the bond component. If you used it correctly, FAFRX would be your fund because performance+SD in the last 3-6 months are more important than 12-36 months, but you still look at it to get clues. Remember, after 4 months, you may find different funds. No fund or manager is a king or irreplaceable and why I used several funds for years and then avoided them for years too. So, any time in 2023 I would use FAFRX (based on 2021+2023) and not FFRHX because I disregard 2022 special situation since I don't think it's coming back for months (probably years) from now. The last portion on the above sentence came to me after more experience and watching markets. Attachments:
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Post by archer on Nov 25, 2023 6:00:35 GMT
FAFRX looks like a better choice for sure, but has a 2.25% front end load as per Fidelity. Some load funds have the load waived, but not this one.
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Post by FD1000 on Nov 25, 2023 12:30:41 GMT
Are you sure about the load? At Fidelity site I found "This fund is now available NTF (No Transaction Fee) and offered load-waived through Fidelity" I also tried to buy and Fidelity site said it's ETF and I didn't see a load.
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Post by archer on Nov 25, 2023 15:11:15 GMT
Thanks FD1000, I was looking at the "details" section on the summary page. After looking again at the top of the page I see the load waive and NTF at the top of the summary page.
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