Tag Archives: seeking

HYG Junk Bond ETF Continues Lower As Oil Prices Fall

The high-yield junk bond ETF (NYSEARCA: HYG ) continues to trend lower, and Monday’s drop of 0.7% left it at a new multi-year low. As HYG’s price moves lower, its yield moves higher, but at 5.8%, the yield is still half of what it was at the start of the equity bull market in early 2009. Investors look for the “risky” equity market to trend in the same direction as the junk bond market, but clearly that hasn’t been the case over the last 18 months or so. As “junk” has fallen, the S&P 500 has continued to trend slightly higher. The reason is because of the drop in oil prices. High-yield debt in the Energy sector accounts for a large portion of the drop in the broad high-yield debt market, but stock price drops in the Energy sector haven’t been enough to move the needle significantly lower for the broad S&P 500. Below is a chart of the price of oil compared to the HYG junk-bond ETF. They have tracked each other very closely recently. We covered this topic in more detail in Monday’s Chart of the Day (subscription required). (click to enlarge)

5 Strong Buy Vanguard Mutual Funds

Vanguard is one of the world’s largest asset management corporations that manage around $3 trillion in assets. It offers nearly 160 domestic funds and 120 funds for foreign markets (as of Dec. 31, 2014). It offers asset management and financial planning services to clients across the world. Unlike other mutual fund companies, Vanguard is owned by the funds themselves, which helps its management focus better on shareholder interests. Among other advantages, it claims to offer low-cost, no-load funds. Vanguard was founded by John C. Bogle in 1975. Below, we share with you 5 top-rated Vanguard mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy), and we expect the fund to outperform its peers in the future. Vanguard Health Care Fund Inv (MUTF: VGHCX ) invests a major portion of its assets in securities of companies primarily involved in operations related to the healthcare domain. VGHCX invests in healthcare companies including pharmaceutical firms, medical supply companies and companies engaged in operations related to medical and biochemical. VGHCX may invest a maximum of half of its assets in companies located in foreign lands. The Vanguard Health Care Investor Fund has returned 10.3% in the year-to-date frame. Jean M. Hynes is the fund manager of VGHCX since 2008. Vanguard Morgan Growth Fund Investor (MUTF: VMRGX ) seeks capital appreciation over the long run. VMRGX uses multiple advisors to invest in domestic companies that are believed to provide above-average revenues and earnings growth. VMRGX invests in securities of companies having large and medium sized market capitalizations. The Vanguard Morgan Growth Investor Fund has returned 7.1% in the year-to-date frame. VMRGX has an expense ratio of 0.40% as compared to the category average of 1.19%. Vanguard Growth and Income Fund Inv (MUTF: VQNPX ) invests in a diversified group of stocks chosen with the help of quantitative analysis. VQNPX seeks stocks that are believed to provide dividend income and have impressive growth prospect and that, as a group, appear likely to provide higher returns than the Standard & Poor’s 500 Index while having similar risk characteristics. VQNPX invests a minimum of 65% of its assets in companies included in the index. The Vanguard Growth and Income Investor Fund has returned 2.2% in the year-to-date frame. As of September 2015, VQNPX held 786 issues with 3.33% of its assets invested in Apple, Inc. (NASDAQ: AAPL ). Vanguard New York Long-Term Tax-Exempt Fund Inv (MUTF: VNYTX ) seeks tax-exempted current income. VNYTX generally invests in municipal debt securities of New York state, local governments and other affiliates. VNYTX invests a lion’s share of its assets in securities that are expected to provide return free from federal and New York state taxes. VNYTX generally maintains a dollar-weighted average maturity between 10 and 25 years. The Vanguard New York Long-Term Tax-Exempt Investor is a non-diversified fund and has returned 3.2% in the year-to-date frame. VNYTX has an expense ratio of 0.20% as compared to the category average of 0.87%. Vanguard High-Yield Tax-Exempt Fund Inv (MUTF: VWAHX ) invests a large chunk of its assets in municipal securities that are rated investment grade by a nationally recognized statistical rating organization (NRSRO). However, a maximum of 20% of VWAHX’s assets may get invested in securities that are rated below investment grade. The Vanguard High-Yield Tax-Exempt Fund has returned 3.2% in the year-to-date frame. Mathew M. Kiselak is the fund manager of VWAHX since 2010. Original post

New TCW Gargoyle Fund Aims To Outperform BXM Buy-Write Strategy

By DailyAlts Staff For investors looking for long-term results superior to the S&P 500 but with reduced risk, TCW and the Gargoyle Group may have a new solution: The TCW/Gargoyle Dynamic 500 Fund (MUTF: TFDIX ), which launched on December 1. The is the second alternative mutual fund to be launched by the two groups in combination with each other (the first was a reorganization of an existing fund ). The new fund seeks to outperform U.S. equities with less risk by selling covered calls against a long position in the S&P 500, with a target net-long market exposure of 50%. The strategy is similar to the well-known BXM Index Buy-Write strategy, but with a “crucial difference” that, according to Gargoyle, can give investors a significant edge. Dynamic Exposure Management The big difference? Unlike the BXM Index, which has a static options position that is re-written each month, Gargoyle dynamically adjusts its options hedge to maintain consistent market exposure between 35% and 65% net long. These adjustments can result in greater downside protection and increased upside participation relative to static buy-write strategies, according to Gargoyle. According to Gargoyle’s website , the investment strategy (not the fund) significantly outperformed the BXM Index since being calculated as the D500 Client Portfolio in August 2012. Through February 2015, the ending period shown on the website, the portfolio returned 29.54% through February 2015, compared to BXM’s 20.33%. The D500’s standard deviation of 4.61% was lower than BXM’s 5.66%, resulting in a Sharpe ratio advantage of 2.19 to 1.29, and a Sortino Ratio edge of 5.26 to 2.72. Fund Details The fund is officially advised by TCW Investment Management, and sub-advised by Gargoyle. Joshua B. Parker and Alan L. Salzbank, both Managing Members at Gargoyle, are the fund’s portfolio managers. Shares of the new fund are available in I (TFDIX) and N (MUTF: TFDNX ) classes, with respective initial minimum investments of $100,000 and $5,000. The investment management fee for both share classes is 0.80%, while the net-expense ratios run 1.00% and 1.25%, respectively, after fee waivers. Past performance does not necessarily predict future results.