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Vanguard Market Neutral Fund
09-26-2016, 04:21 PM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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Vanguard Market Neutral Fund
Is anyone out there using this fund? If so, what say you? Considering it as a bond fund substitute.
Quote:
This fund has a unique and complex investment approach, compared with other Vanguard funds. Its goal is to “neutralize,” or limit, the effect of stock market movement on returns. Because of this, the fund’s return is often uncorrelated to that of the stock market. Unlike other Vanguard funds, this fund uses long- and short-selling strategies, which involve specific risks not apparent in traditional mutual funds. The fund may be appropriate for a small portion of an already well-diversified portfolio.
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Of course with a $250,000 minimum if it is to be a "small portion of an already well-diversified portfolio" then it would have to be a pretty big portfolio!
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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09-26-2016, 04:41 PM
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#2
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,155
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Quote:
This fund has a unique and complex investment approach
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They lost me at this point.
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09-26-2016, 09:58 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,934
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IMO Vanguard has gone somewhat off the rails since Bogle stepped down.
__________________
And if I claim to be a wise man, it surely means that I don't know.
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09-27-2016, 01:12 AM
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#4
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Confused about dryer sheets
Join Date: Apr 2013
Posts: 8
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Greetings!
I use it as a portion of my portfolio; however, I primarily use the Managed Payout (VPGDX) fund in my taxable investments. Hence part of the portfolio.
It is a stock based fund, but produces returns similar to bonds. There is a lot of hate and discontent surrounding it. I think it is a nice part of the overall Managed Payout fund, as its price is relatively stable, while producing some returns.
As far as using it on your own. I would not recommend it, unless you have a massive amount invested elsewhere and are looking to somehow diversify. Hope this helps.
~Dy'Ness
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09-27-2016, 05:35 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
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It's in the portfolio of the Vanguard Managed Payout Fund, which sunk like everything else in 08/09 and has been lackluster since. Like a lot of market strategies, it makes sense on paper.
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09-28-2016, 03:02 PM
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#6
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,290
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Quote:
Originally Posted by Onward
IMO Vanguard has gone somewhat off the rails since Bogle stepped down.
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That may well be. A while back I received a letter from them about a free consultation, so I called. It turned out to be they wanted me to subscribe to a "management group" (I think that's what he called it.) that would manage my funds. For a 1% fee. He goes on to say that in general they do better than 2% or more than people can do by themselves. Knowing the answer, I ask "Is that guaranteed?" Well, no.
Finding this very difficult to believe since it is contrary to everything I've read on investing I declined the offer.
__________________
When I was a kid I wanted to be older. This is not what I expected.
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09-28-2016, 03:41 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
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I had a fund like this from Guggenheim. It ultimately underperformed and was very expensive. I dropped it.
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02-16-2017, 12:27 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Feb 2017
Posts: 1,844
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I've been considering a market neutral fund. It actually looks like there's a niche for it. Here's a comparison between top market neutral, taxable bond, and municipal bond funds, along with the S&P.
$2,500 minimum investment.
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02-16-2017, 01:00 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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"... this fund uses long- and short-selling strategies... "
Sounds like a hedge fund for people who are not rich. Those hedge funds for the super-rich do not beat the market every year either, and in fact often do poorer than plain old active MFs. That's what I have read.
To invest in a hedge fund, one must be an accredited investor, meaning having an annual income of $200K or investable assets of more than $1M. Many posters here would qualify, but I don't think too many go for it.
PS. About this VG fund, if one has only a percentage of portfolio in it, say less than 1/10, then it would not make a dent in the total result, does it? One can just keep his $250K under the mattress. Usually, people put a lot more if not all of their stash in a hedge fund, I think.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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02-16-2017, 01:01 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,806
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Quote:
Originally Posted by Boho
I've been considering a market neutral fund. It actually looks like there's a niche for it. Here's a comparison between top market neutral, taxable bond, and municipal bond funds, along with the S&P.
$2,500 minimum investment.
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Run that chart over the max time frame. Looks like the 'market neutral' fund under-performs just about everything.
I guess many of us have to make this search, before we end up just picking an AA and letting it go.
-ERD50
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02-16-2017, 02:04 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by pb4uski
Is anyone out there using this fund? If so, what say you? Considering it as a bond fund substitute.
Quote:
Quote:
This fund has a unique and complex investment approach, compared with other Vanguard funds. Its goal is to “neutralize,” or limit, the effect of stock market movement on returns.
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Sounds like a CD. Except that a CD is really totally delinked from the stock market, I wouldn't need $500K to open one, the government guarantees I'll get my money back, and the issuer guarantees it will be worth more (nominally) when I take the money out than when I put it in.
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