Why I like certain alternative investments

COcheesehead said:
I ditched all my EGRAX and am hiding out in HOSAX.
HOSAX has one of the highest Sharpe’s I have ever seen. 3.42. A std dev close to 1 making it almost like a money market and a yield close to 6%
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Thanks for noting HOSAX.
Do you see this as a fund you will hold onto? The reason I ask is b/c you really do a huge amount of trading funds. Every time I look, you seem to have traded into something else :) So I am keen to know if you plan to hold onto HOSAX thru this complex time in the market.
Thanks
 
We sold the last of our EGRAX yesterday (about $100K) and put in a buy order for HOSIX tomorrow. We already have HOSIX which we bought in April. We figure that is a good place to put money into fixed income. This afternoon we researched various options on where to put the $100K - MYGAs which we have a bunch of money already, Treasury bonds and TIPs, and HOSIX. Our conclusion is to just stick the money to HOSIX. We are at 15% fixed income. But if it were up to me, I would still be 100% equities which I am, but my spouse is a bit more conservative and he keeps a portion of his IRA in fixed income.
 
RetiredHappy said:
We sold the last of our EGRAX yesterday (about $100K) and put in a buy order for HOSIX tomorrow. We already have HOSIX which we bought in April. We figure that is a good place to put money into fixed income. This afternoon we researched various options on where to put the $100K - MYGAs which we have a bunch of money already, Treasury bonds and TIPs, and HOSIX. Our conclusion is to just stick the money to HOSIX. We are at 15% fixed income. But if it were up to me, I would still be 100% equities which I am, but my spouse is a bit more conservative and he keeps a portion of his IRA in fixed income.
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In a rising rate environment, I wouldn’t lock into a fixed rate yet. I’d wait for inflation to top out. The 2022 playbook is in play here.
 
RetiredHappy said:
We sold the last of our EGRAX yesterday (about $100K) and put in a buy order for HOSIX tomorrow. We already have HOSIX which we bought in April. We figure that is a good place to put money into fixed income. This afternoon we researched various options on where to put the $100K - MYGAs which we have a bunch of money already, Treasury bonds and TIPs, and HOSIX. Our conclusion is to just stick the money to HOSIX. We are at 15% fixed income. But if it were up to me, I would still be 100% equities which I am, but my spouse is a bit more conservative and he keeps a portion of his IRA in fixed income.
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I've never heard of HOSIX until now. Do you know anything about the firm and the management team? They only started in 2023. Was there a predecessor fund? I like more familiar name bond houses and/or 2022 performance history. This lacks both. Good luck.
 
PaulR888 said:
I've never heard of HOSIX until now. Do you know anything about the firm and the management team? They only started in 2023. Was there a predecessor fund? I like more familiar name bond houses and/or 2022 performance history. This lacks both. Good luck.
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Holbrook had been an around for awhile, 2015, with impressive results. HOSAX/HOSIX is the highest Sharpe ratio I have ever seen.
 
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PaulR888 said:
I've never heard of HOSIX until now. Do you know anything about the firm and the management team? They only started in 2023. Was there a predecessor fund? I like more familiar name bond houses and/or 2022 performance history. This lacks both. Good luck.
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Not luck. Just research. Lots of research. Morningstar is good place to start. You need to learn to fish, cannot do it for you.
 
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PaulR888 said:
I've never heard of HOSIX until now. Do you know anything about the firm and the management team? They only started in 2023. Was there a predecessor fund? I like more familiar name bond houses and/or 2022 performance history. This lacks both. Good luck.
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Let me share a few things I know about HOSIX.

1) The Sharpe ratio is unusually high partly due to structural design. First, since it is a mutual fund rather than an ETF, you can always buy and sell it at its NAV with the downside that this happens once a day.

Second, and this is the unusual part, it trades with accrued interest. What the heck does this mean? It means if you buy it, you start getting accrued interest from the date of purchase to the next distribution and when you sell it you get a final accrued distribution on the next distribution date after the sale. This is also called "trading flat" and it tends to keep the NAV unchanged other than for changes in the value of underlying securities.

Together these two structural components give rise to amazingly low volatility and a high Sharpe ratio but they are driven more by the math than the PM's skill (which is very good IMO).

2) The company behind HOSIX, Holbrook holdings is a rather small team. The good part is they are approachable and I have contacted them including the HOSIX PM and they readily reply by email. The not so good part is they produce bare bones data on their web site, so it's difficult to get information that way. In particular they update their distribution data with a much greater lag than you find on M#.

Bottom line - I have invested in HOSIX in the past with good result. However, I switched to EGRIX for higher return with higher volatility. Since EGRIX has faltered recently (see my earlier post #989) I have trimmed back on EGRIX and rather than take the safer route with HOSIX, I have moved a portion of EGRIX to QMHNX and QRPNX for higher return with higher volatility.

I will probably keep the allocations this way until the Iran war truly ends at which time I will reevaluate. While I sold my QLENX position and a small ORR position, I keep these on my watch list to see if they will begin to recover after the war.
 
MSDalt said:
Can HOSIX be purchased without a transaction fee? If so, where?
Thanks,
Michael
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Fidelity sells HOSAX with no fee. HOSIX and HOSAX are essentially the same except for minimums and management fees. HOSIX has a tiny bit better return because of the lower fee,
 
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Semi-Retyrd said:
Let me share a few things I know about HOSIX.

1) The Sharpe ratio is unusually high partly due to structural design. First, since it is a mutual fund rather than an ETF, you can always buy and sell it at its NAV with the downside that this happens once a day.

Second, and this is the unusual part, it trades with accrued interest. What the heck does this mean? It means if you buy it, you start getting accrued interest from the date of purchase to the next distribution and when you sell it you get a final accrued distribution on the next distribution date after the sale.
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This sounds amazingly like a money market, but one that pays almost 6% and that’s why I am in it. If you look at bond funds recently they almost all are getting hammered, but not this one.
I am completely out of EGRAX, but continue to add to my AQR funds.
 
Semi-Retyrd said:
Let me share a few things I know about HOSIX.

1) The Sharpe ratio is unusually high partly due to structural design. First, since it is a mutual fund rather than an ETF, you can always buy and sell it at its NAV with the downside that this happens once a day.

Second, and this is the unusual part, it trades with accrued interest. What the heck does this mean? It means if you buy it, you start getting accrued interest from the date of purchase to the next distribution and when you sell it you get a final accrued distribution on the next distribution date after the sale. This is also called "trading flat" and it tends to keep the NAV unchanged other than for changes in the value of underlying securities.

Together these two structural components give rise to amazingly low volatility and a high Sharpe ratio but they are driven more by the math than the PM's skill (which is very good IMO).

2) The company behind HOSIX, Holbrook holdings is a rather small team. The good part is they are approachable and I have contacted them including the HOSIX PM and they readily reply by email. The not so good part is they produce bare bones data on their web site, so it's difficult to get information that way. In particular they update their distribution data with a much greater lag than you find on M#.

Bottom line - I have invested in HOSIX in the past with good result. However, I switched to EGRIX for higher return with higher volatility. Since EGRIX has faltered recently (see my earlier post #989) I have trimmed back on EGRIX and rather than take the safer route with HOSIX, I have moved a portion of EGRIX to QMHNX and QRPNX for higher return with higher volatility.

I will probably keep the allocations this way until the Iran war truly ends at which time I will reevaluate. While I sold my QLENX position and a small ORR position, I keep these on my watch list to see if they will begin to recover after the war.
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Very impressive. You obviously are an investor that does his homework and proceeds with thoughtful investing. This is what I was hoping to see. Rather than I don't know, I am just following some highly esteemed forum contributer who says it's good.
 
I don’t post all my investments choices on the forum. I pick what’s right for me based on my analysis, but more importantly my goals. Sometimes I share those, but knowing there is a risk of pushback from members who don’t share the same goals or understand the decision matrix I went through in order to purchase the investment. That’s fine. I just wish there was more respect given to posters who actually share their trades rather than posting judgements on quantity of trades or post count or differing investment philosophies. It probably won’t happen, but one can wish.
 
COcheesehead said:
I don’t post all my investments choices on the forum. I pick what’s right for me based on my analysis, but more importantly my goals. Sometimes I share those, but knowing there is a risk of pushback from members who don’t share the same goals or understand the decision matrix I went through in order to purchase the investment. That’s fine. I just wish there was more respect given to posters who actually share their trades rather than posting judgements on quantity of trades or post count or differing investment philosophies. It probably won’t happen, but one can wish.
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Hi ... My mantra is Always Be Learning. It's hard to learn without even a full bullet points about the Why. It's analagous to handicapping the Kentucky Derby. Just telling someone I like a certain horse without the Why is not too helpful for anyone's learning. Sorry if you misinterpreted my motive.
 
PaulR888 said:
Hi ... My mantra is Always Be Learning. It's hard to learn without even a full bullet points about the Why. It's analagous to handicapping the Kentucky Derby. Just telling someone I like a certain horse without the Why is not too helpful for anyone's learning. Sorry if you misinterpreted my motive.
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I think I have been pretty open with the “whys”. I use Sharpe ratios, standard deviations mostly and I like uncorrelated assets. I created an entire thread on it.

ETF/Fund Research Thread - Learning to Fish - Analytics Available

I thought I would start a learning thread on some of the analytics available to DIY investors for researching ETF and funds. I look at it as teaching someone to fish vs being given the fish. These analytics are available from most brokerages and other financial sites. The use of screening tools...
www.early-retirement.org www.early-retirement.org
 
Or maybe ask AI program about them..

For an investor who wants higher income and accepts specialized credit risk, HOSIX is the cleaner choice because of the lower expense ratio and institutional structure. HOSAX can still make sense in a brokerage account if HOSIX is not available, but I would view it as the more expensive option. I would be cautious about using either one as a core bond holding because the strategy is specialized and the fees are high relative to many plain-vanilla bond funds.

Practical fit​

This fund may fit best as a satellite income position rather than a foundation holding. It is more suitable for someone who understands securitized credit and is willing to accept credit, liquidity, and valuation risk in exchange for higher current income. If your goal is stable ballast for a retirement portfolio, a lower-cost core bond or municipal bond fund may be easier to live with.
 
Bruno said:
Or maybe ask AI program about them..

For an investor who wants higher income and accepts specialized credit risk, HOSIX is the cleaner choice because of the lower expense ratio and institutional structure. HOSAX can still make sense in a brokerage account if HOSIX is not available, but I would view it as the more expensive option. I would be cautious about using either one as a core bond holding because the strategy is specialized and the fees are high relative to many plain-vanilla bond funds.

Practical fit​

This fund may fit best as a satellite income position rather than a foundation holding. It is more suitable for someone who understands securitized credit and is willing to accept credit, liquidity, and valuation risk in exchange for higher current income. If your goal is stable ballast for a retirement portfolio, a lower-cost core bond or municipal bond fund may be easier to live wit
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Here is a Boglehead favorite bond index BND vs HOSAX

IMG_1332.jpeg
 
COcheesehead said:
I think I have been pretty open with the “whys”. I use Sharpe ratios, standard deviations mostly and I like uncorrelated assets. I created an entire thread on it.

ETF/Fund Research Thread - Learning to Fish - Analytics Available

I thought I would start a learning thread on some of the analytics available to DIY investors for researching ETF and funds. I look at it as teaching someone to fish vs being given the fish. These analytics are available from most brokerages and other financial sites. The use of screening tools...
www.early-retirement.org www.early-retirement.org
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OK, fair enough. Unfortunately, Sharpe, Sortino and SD don't help me much. I am more of an English major as opposed to a Math major. Now uncorrelated assets I understand. I learned that can be the attraction of EGRIX.
 
PaulR888 said:
OK, fair enough. Unfortunately, Sharpe, Sortino and SD don't help me much. I am more of an English major as opposed to a Math major.
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You stated you wanted to learn, well you gotta study too. :)
 
PaulR888 said:
I can only do what I have the ability to do. To not upset in future, I am making a note to steer clear. Take care.
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I know the feeling Paul... there are several people on these sites that say this is a great investment and lot of people buy them. I have also done that but now finding out most of them dont give you notice when to bail and before you know it you are behind the 8-ball. COcheesehead has helped me with buying bonds but they are most of the time a buy and hold. Like you I am starting to find out just stay in the lane I know...and feel too old to learn to be as smart as these Guru. I cant even spell what all CoCheesehead is doing. :)
 
Let’s keep in mind this is just a forum to talk about things. Share what we as individuals are doing. Share things we find and how we find them. The action to purchase or sell these investments is up to the individual and should be contemplated at length to see if it makes sense for you individually to own these to meet your goals. No one on here should be looked at as a financial guide by any means.
 
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