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Post by chang on Oct 18, 2021 9:04:53 GMT
Check out the graph of FFRHX: 1. Last 1 year it has rocked - now late to the party? 2. Last 5 years - still hasn’t fully recovered from the March 2020 crash to its LT “average” value 3. Last 20 years - chart is basically flat, punctuated by the major crashes of 2008 and 2020, with a few other knicks and kinks here and there. With interest rates in no seeming danger of falling now, is this a reasonable candidate for part of a low-cost, short-duration FI portfolio? ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I’m thinking of a multi-pronged FI portfolio: 1. Cash-like (VUSFX and RPHIX) 2. HY (“conservative” VWEAX) 3. IT I/G (“conservative” DODIX) 4. ST Mortgage/Securitized (RCTIX) 5. FR/BL (“conservative” FFRHX) 6. ST TIPs (VTIP/VTAPX) 7. LT Corps (held within VGWAX and VWIAX) I already have 1, 2, 3, 4 and 7; numbers 5 and 6 are still up in the air.
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Post by Chahta on Oct 18, 2021 12:37:13 GMT
I agree that BL/FR may be due for a good stretch. I am in. I do not believe inflation is going away soon. Supply chain woes, wages being increased to attract workers, lack of workers, costs that are going up every day, energy costs and supplies starting to go crazy etc. The FED is getting pressure to raise rates and move away from it's zero rate policy. They will need to raise rates to curb inflation. Get ready for Jimmy Carter II.
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Post by yogibearbull on Oct 18, 2021 13:08:34 GMT
FR/BL are good when rates are expected to rise. But when they don't, they act just like ST-HY. Although there are Treasury-floaters, almost all FR/BL is lower-rated (junk). Remember that small or newer companies that tap into the FR/BL market are those that cannot even access the HY bond market. So, use FR/BL like spices - little bit for flavor.
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Post by anovice on Oct 18, 2021 13:11:48 GMT
I have owned a large amount of FFRHX and SAMBX since Sebastian Page's interview on Wealthtrack in February. Both have returned about 3.10% and have a similar 3-year SD.
You may want to look at MWFRX. On a 3-year basis, it has returned 10.89%, 1.08% lower than FFRHX, and 2.34% better than SAMBX, but with a lower SD.
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Post by Chahta on Oct 18, 2021 13:46:53 GMT
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Post by chang on Nov 12, 2021 3:30:38 GMT
I bought FFRHX the day after the OP, as reported here. A small but not trivial amount. Here I am, nearly a month later, and it's been extremely non-volatile (compare to DODIX, which has experienced daily moves of ±0.5%!) and crept slowly upwards. The logical question, therefore, is should I add another bucket of FFRHX. (One of the most conservative FR/BL funds.) I'm still holding cash that I want to deploy, and this seems to be one of the best and safest (??) ways to do so...
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Post by FD1000 on Nov 12, 2021 5:02:20 GMT
I bought FFRHX the day after the OP, as reported here. A small but not trivial amount. Here I am, nearly a month later, and it's been extremely non-volatile (compare to DODIX, which has experienced daily moves of ±0.5%!) and crept slowly upwards. The logical question, therefore, is should I add another bucket of FFRHX. (One of the most conservative FR/BL funds.) I'm still holding cash that I want to deploy, and this seems to be one of the best and safest (??) ways to do so... Great risk/reward. Performance for 1-5 years in the top 12-16% and excellent 1-3 months performance in the top 2-7%( link).
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Post by Fearchar on Nov 12, 2021 11:04:59 GMT
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Post by Chahta on Nov 12, 2021 13:06:20 GMT
I bought FFRHX the day after the OP, as reported here. A small but not trivial amount. Here I am, nearly a month later, and it's been extremely non-volatile (compare to DODIX, which has experienced daily moves of ±0.5%!) and crept slowly upwards. The logical question, therefore, is should I add another bucket of FFRHX. (One of the most conservative FR/BL funds.) I'm still holding cash that I want to deploy, and this seems to be one of the best and safest (??) ways to do so... I like the way yogibearbull , explained BL funds; use like spice for a little flavor, or words to that effect. I think moving forward they will work since rates most likely will move up. JMHO. Compare MWFLX and FFRHX in Backtest. To me MWFLX is has better numbers.
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Post by fred495 on Nov 12, 2021 14:37:12 GMT
Chahta said: "Compare MWFLX and FFRHX in Backtest. To me it is has better numbers."
Sorry, but which fund has the better numbers?
Fred
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Post by fishingrod on Nov 12, 2021 14:57:52 GMT
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Post by Chahta on Nov 12, 2021 15:12:59 GMT
Sorry for not being clear. Yes, MWFLX shows better in Backtest to me. I don't strive for the largest CAGR always, which is where FFRHX is superior. It is not needed in my case. I generally look at 3-5 years.
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Post by yogibearbull on Nov 12, 2021 15:20:48 GMT
MWFLX has similar performance with lower volatility. My caution is just that without rates moving up, these funds are SY-HY and most companies involved are lower-rated or newer companies (very speculative area now). PV MWFLX FFRHX
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Post by Chahta on Nov 12, 2021 15:21:32 GMT
............. I’m thinking of a multi-pronged FI portfolio: 1. Cash-like (VUSFX and RPHIX) 2. HY (“conservative” VWEAX) 3. IT I/G (“conservative” DODIX) 4. ST Mortgage/Securitized (RCTIX) 5. FR/BL (“conservative” FFRHX) 6. ST TIPs (VTIP/VTAPX) 7. LT Corps (held within VGWAX and VWIAX) I already have 1, 2, 3, 4 and 7; numbers 5 and 6 are still up in the air. I like it. Similar to what I have done. But I am doing the HY muni trade too.
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Post by chang on Nov 12, 2021 19:31:22 GMT
MWFLX has four managers with almost $0 invested in the fund. That’s a turn-off for me. FFRHX’s manager has >$1m invested. This is just an idiosyncrasy of mine, I don’t like to have more money in the fund than the manager himself does.
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Post by yogibearbull on Nov 12, 2021 21:23:52 GMT
Looking at MatWest fund combined SAI, none of its funds have large ownerships by portfolio managers. Parent TCW is 44% owned by employees, 31% by Carlyle group (private-equity), 25% by Nippon Life Insurance. There are internal incentives for MatWest fund managers to own more of parent TCW.
However, M* data on fund manager holdings can be shallow. This came up in discussions about other funds such as PRWCX where manager Giroux owns a whole bunch in PRWCX-like strategies that he manages for Price, but not so much in PRWCX itself.
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Post by Chahta on Nov 12, 2021 22:42:38 GMT
I understand it looks good for managers to have skin in the game. But if I was 40-50 years old, I would consider MWFLX or FFRHX as "dead money" in this market. I owned no bonds until I was 65 years old. or They know something we don’t.
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Post by FD1000 on Nov 13, 2021 20:02:38 GMT
Looking at FFRHX and you can clearly see, it's not a conservative one in the BL category. Looking at Fidelity ( screen) for the lowest SD per 3 years shows many funds with better SD. Adding 2 more performance criteria: 1) YTD>5% 2) 3 year > 3% and you get the following( link). The link is sorted by lowest SD first. See first attachment. FFRHX has a nice risk/reward, you may consider others. In my case, I held OOSAX based on momo for a couple of months. The fund has 2 new managers since 10/2020 which was another reason why I paid less attention prior to that. See second attachment. I don't care if the managers have money in their funds. Why would a 40 years old manager invests in bonds? The manager can have different goals. Attachments:
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Post by chang on Dec 6, 2021 3:34:38 GMT
FFRHX not so great during the last month, -0.63%. Maybe now is the time to add a 2nd bucket?
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Post by Chahta on Dec 6, 2021 13:44:15 GMT
It is representative of most bond funds this last month, other than HY munis. I think part of the headwind for BL is that there is no clear rate direction. Up 1 day, down the next.
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Post by alvinthechipmunk on Dec 19, 2021 20:32:54 GMT
BL, yes. I'm going to start a position in PRFRX, just cuz I'm already mostly in TRP. Rates will be moving up. I heard Giroux (PRWCX) recommend it and said HE himself owns it. He doesn't like very much else about the bond world, lately. BTW, that MetWest fund has a $3M entry.
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Post by yogibearbull on Dec 19, 2021 21:11:22 GMT
BL, yes. I'm going to start a position in PRFRX, just cuz I'm already mostly in TRP. Rates will be moving up. I heard Giroux (PRWCX) recommend it and said HE himself owns it. He doesn't like very much else about the bond world, lately. BTW, that MetWest fund has a $3M entry. MWFLX has a lower min, higher ER class MWFRX that is no-load/NTF at Fido and Schwab.
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Post by chang on Dec 20, 2021 0:30:51 GMT
Glad that someone revived this thread. Is there a consensus that FR/BL remains a good place to put new money?
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Post by Chahta on Dec 20, 2021 1:21:51 GMT
I picked up MWFLX a few months ago. I think once rates start up it will do well. It is one of the few I could find that M* rated as low risk.
MWFLX is only $2500 min at Schwab plus $49.95 TF.
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Post by Fearchar on Dec 20, 2021 2:20:20 GMT
Lately, when reviewing various funds for consideration, I throw them into the portfolio analyzer along with a few of my favorites, just to see if they get picked up or not.
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Post by Fearchar on Dec 20, 2021 2:28:40 GMT
and here is the transition map for efficient frontiers
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Post by fred495 on Dec 20, 2021 3:18:03 GMT
Glad that someone revived this thread. Is there a consensus that FR/BL remains a good place to put new money? Good question, chang. I am asking myself the same question. Look forward to the opinions of other, more seasoned and experienced investors. Thanks, Fred
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Post by Chahta on Dec 20, 2021 11:59:29 GMT
Glad that someone revived this thread. Is there a consensus that FR/BL remains a good place to put new money? Good question, chang. I am asking myself the same question. Look forward to the opinions of other, more seasoned and experienced investors. Thanks, Fred I like YBB’s thinking. If rates don’t go up FR/BL funds act like ST HY funds.
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Post by yogibearbull on Dec 20, 2021 14:00:16 GMT
Fearchar, efficient-frontier or portfolio optimization for periods when rates were NOT rising won't be favorable to FR/BL. FR/BL work well during rising rates, but act just as ST-HY when rated are down or flat, as noted earlier. As the rates are expected to rise eventually (in 2022-23), but this selloff is temporarily causing rates to drop (flight to safety), that may be a good opportunity to pickup FR/BL. The risk is that Covid-19-Omicron causes 2020-like disaster but that isn't the expectation.
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Post by Fearchar on Dec 20, 2021 14:26:05 GMT
Thanks yogibearbull , good point. Here is a map between 2012-2014 when TIP rates rose. Unfortunately, there is insufficient data for MWFLX, so that fund is not included. Floating Rate fund PRFRX and AGG (but not FFRHX) were useful up to about 5% standard deviation.
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