Why I like certain alternative investments

COcheesehead said:
I am not whining. I added on the dip. I don’t like to see down days just like anyone else, but looking at the bigger picture my AQR funds, except one, are still beating the market.
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I am beating the market too….Beating it on the way down. :)

I used CTA because it was active and an etf and just easier to buy for a test. Its back tests were reasonable vs. AQR. But real disappointed. Almost straight down as oil as fallen. CTA’s chart and USO oil ticker chart look a lot alike.

Luckily just a very small test allocation. And a month is just a month.

Oh well. If I turn this into a real position I had planned to split between AQR funds and DBMF.
 
CTA, DBMF, KMLM, QMHNX, etc. so called managed futures follow trends and move into commodities, bonds, precious metals, and even stocks so I suppose trends take time to form. In a market that is up one day and down the next, these funds don’t do well. I hold them for their negative correlation to stocks and hopefully will reduce my losses in a bear market.
 
I sold my Roth position in QNZNX today. I added DGRO/QQQ/cash in a 3/2/3 ratio in its place for now.
This wasn't based on anything solid, other than a dislike of the recent negative moves that just made me go "huh". I still hold QRPNX.
Maybe I prefer downside when it's more predictable...:peace:

I hope they both do well today.
 
SteveTX said:
Maybe I prefer downside when it's more predictable...
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These funds are very uncorrelated to the equity markets and for me that is part of the attraction. So they dance to the beat of a different drum. I take the downside of the last few days with unexpected upside on days you wouldn’t expect - like today. The fund is still up over 11.6% YTD vs the S&P at about 7.5%
 
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COcheesehead said:
These funds are very uncorrelated to the equity markets and for me that is part of the attraction. So they dance to the beat of a different drum. I take the downside of the last few days with unexpected upside on days you wouldn’t expect - like today. The fund is still up over 11.6% YTD vs the S&P at about 7.5%
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I agree with your take, with the exception of the recent 3 month performance, which is what has my attention. I imagine I cut the cord too quickly, but had to go with my gut on it.
 
SteveTX said:
I agree with your take, with the exception of the recent 3 month performance, which is what has my attention. I imagine I cut the cord too quickly, but had to go with my gut on it.
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Other than Tuesday and Wednesday with a bounce back yesterday I am not seeing a 3 month decline in my holdings.

IMG_1378.jpeg
 
SteveTX said:
Sorry, I wasn't meaning to imply a decline, just a 3 month underperformance of ~7% to the SPY.
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Same chart with SPY added. I respect your decision, just not seeing what you’re seeing, but my wife accuses me of missing a lot of things

IMG_1379.jpeg
 
tutan said:
CTA, DBMF, KMLM, QMHNX, etc. so called managed futures follow trends and move into commodities, bonds, precious metals, and even stocks so I suppose trends take time to form. In a market that is up one day and down the next, these funds don’t do well. I hold them for their negative correlation to stocks and hopefully will reduce my losses in a bear market.
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I would just look at this 3-year chart and would not use managed futures.

1782515370726.png



Then I would look at YTD to get a closer view.
CTA=huge volatility=never
Which fund is the only one with an uptrend? Only QNZNX
QLENX is now lower than January.
DBMF isn't bad but still lower than March. One year is also OK. I would rate it second best.
KMLM is negative for 3 years. I pass, although it did OK YTD.

My goal is to own funds that have strong momentum over the last 3-6 months while also demonstrating solid performance over the past 1-3 years.

When I use a fund screener, I keep adding increasingly strict criteria until I'm left with only a handful of candidates.

I don't mind if my screening process is demanding. I'd rather evaluate a small number of exceptional funds than hundreds of average ones.

In other words, I look for the very best funds I can find and rarely compromise. That disciplined approach usually leaves me with just a few funds to choose from.

1782515599903.png
 
I just did at Fidelity a fund screener for all Alternative + SD<10 + Sharp>1 sorting by
3 years = (link)

QNZIX/QNZAX is number one. I like to own one fund.
If I want another. BDMIX/BDMAX with SD=5.45
Sharpe for both over 3.

Suppose I look at all funds at Fidelity with SD<10 + Sharp>1.75 (because I got too many)
sorted by 3 years. See (link).
Two easy choices: QNZIX/QNZAX + TIBIX.

QLENX was supposed to show up, but it's not. SD close to 3 + SD < 8.
Probably because it's closed. I can't find how to include closed ones.
 
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I did it at Schwab for all funds with SD<10 + Sharp>1.5

122 Screen Results
Click to sort bySymbolClick to sort byDescriptionClick to sort byStandard DeviationClick to sort byTotal Return (YTD)Click to sort byAverage Annual Return (3 Year)Click to sort bySharpe Ratio
QNZIXAQR Trend Total Return Fund Class I9.0615.87%32.58%2.68Click to launch a chart and summary for AQR Trend Total Return Fund Class I in a new window
QNZNXAQR Trend Total Return Fund Class N9.0115.85%32.29%2.67Click to launch a chart and summary for AQR Trend Total Return Fund Class N in a new window
QLERXAQR Long-Short Equity Fund Class R67.66-0.56%28.03%2.70Click to launch a chart and summary for AQR Long-Short Equity Fund Class R6 in a new window
QLEIXAQR Long-Short Equity Fund Class I7.66-0.57%27.93%2.68Click to launch a chart and summary for AQR Long-Short Equity Fund Class I in a new window
QLENXAQR Long-Short Equity Fund Class N7.67-0.68%27.60%2.65Click to launch a chart and summary for AQR Long-Short Equity Fund Class N in a new window
TIBIXThornburg Investment Income Builder Fund Class I8.9917.77%27.08%2.20Click to launch a chart and summary for Thornburg Investment Income Builder Fund Class I in a new window
TIBAXThornburg Investment Income Builder Fund Class A9.0017.67%26.78%2.17Click to launch a chart and summary for Thornburg Investment Income Builder Fund Class A in a new window
BPLSXBoston Partners Long/Short Equity Fund Institutional Class9.679.97%23.28%1.74Click to launch a chart and summary for Boston Partners Long/Short Equity Fund Institutional Class in a new window
BPLEXBoston Partners Long/Short Equity Fund Investor Class9.679.87%22.97%1.72Click to launch a chart and summary for Boston Partners Long/Short Equity Fund Investor Class in a new window
CPIEXCounterpoint Tactical Equity Fund Class I9.8811.06%22.92%1.68Click to launch a chart and summary for Counterpoint Tactical Equity Fund Class I in a new window
CPAEXCounterpoint Tactical Equity Fund Class A9.9211.01%22.61%1.65Click to launch a chart and summary for Counterpoint Tactical Equity Fund Class A in a new window
PRPFXPermanent Portfolio Permanent Portfolio Class I8.357.12%22.14%1.89Click to launch a chart and summary for Permanent Portfolio Permanent Portfolio Class I in a new window
PRPDXPermanent Portfolio Permanent Portfolio Class A8.367.02%21.84%1.86Click to launch a chart and summary for Permanent Portfolio Permanent Portfolio Class A in a new window
BGCKXBlackRock Global Equity Market Neutral Fund K Shares5.4510.86%21.83%2.82Click to launch a chart and summary for BlackRock Global Equity Market Neutral Fund K Shares in a new window
BDMAXBlackRock Global Equity Market Neutral Fund A Shares5.4510.67%21.48%2.77Click to launch a chart and summary for BlackRock Global Equity Market Neutral Fund A Shares in a new window
TOWFXTowpath Focus Fund Institutional Share Class9.257.25%20.52%1.57Click to launch a chart and summary for Towpath Focus Fund Institutional Share Class in a new window
GARIXGotham Absolute Return Fund Institutional Class Shares8.7510.85%20.22%1.63Click to launch a chart and summary for Gotham Absolute Return Fund Institutional Class Shares in a new window
QMNRXAQR Equity Market Neutral Fund Class R68.22-6.44%20.09%1.72Click to launch a chart and summary for AQR Equity Market Neutral Fund Class R6 in a new window
QMNIXAQR Equity Market Neutral Fund Class I8.21-6.49%19.97%1.71Click to launch a chart and summary for AQR Equity Market Neutral Fund Class I in a new window
QMNNXAQR Equity Market Neutral Fund Class N8.22-6.56%19.63%1.68Click to launch a chart and summary for AQR Equity Market Neutral Fund Class N in a new window


 
How old is your data? I just ran QLENX and this is what it shows:
1782534322741.png
 
COcheesehead said:
Same chart with SPY added. I respect your decision, just not seeing what you’re seeing, but my wife accuses me of missing a lot of things

View attachment 64476
Click to expand...
I think what SteveTx is referring to is the relative underperformance of these funds vs. SPY when you do a 3 months look-back from April with the exception of QRPNX
1782558113312.png
 
Mr T said:
I think what SteveTx is referring to is the relative underperformance of these funds vs. SPY when you do a 3 months look-back from April with the exception of QRPNXView attachment 64498
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Thank you for noticing my exact wording Mr T!
"Sorry, I wasn't meaning to imply a decline, just a 3 month underperformance of ~7% to the SPY."
And QNZNX underperformed the S&P again yesterday. I'm hoping that trend changes for anyone invested.
For me, it's just harder to stick with something after a 3 month underperformance if I don't understand it to some extent. I've been burned a couple of times in the past by funds that I gave too long of a leash. Once bitten, twice shy I guess.
 
The numbers tell the story.

1782660189866.png



1782662446149.png



You can buy BPLSX at Fidelity with a fee. Min = $1. You can use auto investment and buy it for just $10.
At Fidelity, there is a fee. Min=$100K

BPLEX = no fee. Fid min =$2500, Schwab min = $1.
 
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FD1000 said:
The numbers tell the story.

View attachment 64527


View attachment 64528


You can buy BPLSX at Fidelity with a fee. Min = $1. You can use auto investment and buy it for just $10.
At Fidelity, there is a fee. Min=$100K

BPLEX = no fee. Fid min =$2500, Schwab min = $1.
Click to expand...
If you like BDMIX and BIMBX, like I do, there's another option I'm considering adding, IALT. All the same people doing the same things. It's an ETF and easy to buy./sell.
 
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IncomeOriented said:
Bimbx if paired with bdmix are complementary risk reward.
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Why would you pair them?
Investors want to own funds that improve their portfolio's risk-adjusted performance.

Let's look at 3 years. As you can see, BIMBX hardly made any money, just 3%+, for about 1.5 years. At the same time, BDMIX made 33%.

1782687407772.png



1782687483329.png



This is why we use tools that tell us performance, Sharpe ratio(risk-adjusted performance), Sortino (down SD).
Below is 3 years. The left column is 50/50 BIMBX/BDMIX. The right column is 100% BDMIX.
Just BDMIX made 21.75% annually; 50/50 made just 13.97%. BDMIX has better Sharpe and Sortino.
While SD volatility of BDMIX was a bit higher than 50/50, the performance was 55% higher, and that's why it's worth it.
Just to make it really clear, MM made more than BIMBX in the last 1.5 years with zero SD=volatility and no risk.

1782687890152.png
 
FD1000 said:
Why would you pair them?
Investors want to own funds that improve their portfolio's risk-adjusted performance.

Let's look at 3 years. As you can see, BIMBX hardly made any money, just 3%+, for about 1.5 years. At the same time, BDMIX made 33%.

View attachment 64545


View attachment 64546


This is why we use tools that tell us performance, Sharpe ratio(risk-adjusted performance), Sortino (down SD).
Below is 3 years. The left column is 50/50 BIMBX/BDMIX. The right column is 100% BDMIX.
Just BDMIX made 21.75% annually; 50/50 made just 13.97%. BDMIX has better Sharpe and Sortino.
While SD volatility of BDMIX was a bit higher than 50/50, the performance was 55% higher, and that's why it's worth it.
Just to make it really clear, MM made more than BIMBX in the last 1.5 years with zero SD=volatility and no risk.

View attachment 64547
Click to expand...
Nice charts, but the point was…If pairing the “strategies“ of those two funds, within the same fund, IALT, the results are complementary.
 
IncomeOriented said:
Nice charts, but the point was…If pairing the “strategies“ of those two funds, within the same fund, IALT, the results are complementary.
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I'm not sure I understand the above. Complementary investments are assets or strategies that perform better together than they do in isolation.

Are you saying that BDMIX and BIMBX together are better than just BDMIX?
OR
Are you saying that BDMIX and BIMBX together are better than just IALT?

IALT is a new fund that started last Dec per M* chart.
The chart below shows that IALT is similar to BDMIX in performance, but IALT has lower SD. In my world, IALT is the winner and the only one I would select.
I would never own a fund like BIMBX where the trend is down while I can find other funds with trends going up. The funds that are up made around 10%. BIMBX made about 0.5%.

Why would I own both and make half?


1782705282099.png
 
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