Re: Fairly similar to Joe here ...& BOND FUND SHORTING

Posted by Cathy on November 07, 2009 at 01:00:16:

In Reply to: Fairly similar to Joe here ... posted by AJ on November 06, 2009 at 10:22:03:

Thanks for your follow-up, AJ. Now that I think of it, I do remember a couple of the "all-bond" funds I was checking had shorted and moved a large percentage out of bonds (I think). So it sounds like even all-bond funds can change their allocation drastically enough that one's bond percentage can change dramatically.

Since only a few bond funds I checked did that, does that mean those few bond fund managers are more "on top" of current market - or does that high percentage of shorting mean the bond managers should be managing other fund types if they can't find any bonds that will do well in this market?

: ... have a target allocation, use an Excel spreadsheet, do quarterly updates, use M* figures because it's easy to grab a batch of them without much trouble, and don't get too anal about it (because M* isn't always exactly right anyway).

: I use two categories for bonds and other non-stock investments: intermediate-long-other and short-cash, including things like Hussman's funds, gold holdings, and foreign bonds in "interm-long-other," and counting a stock fund's cash holding in the "short-cash" category only if a manager makes a habit of keeping 10% or more in cash.

: I also keep up with the percentages of foreign stock funds by major world region; to me, those are important statistics when you have a large percentage in foreign, as I do.

: Good luck - AJ

: : If one decides on a Portfolio holding 40% bonds, then also has some Balanced, Blend or Large/Small Caps funds that also include bond percentages, should the percentage of bonds held by these funds be included in with the total percentage of the all-bond part of your portfolio?

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Comments:	: Thanks for your follow-up, AJ. Now that I think of it, I do remember a couple of the "all-bond" funds I was checking had shorted and moved a large percentage out of bonds (I think). So it sounds like even all-bond funds can change their allocation drastically enough that one's bond percentage can change dramatically. : Since only a few bond funds I checked did that, does that mean those few bond fund managers are more "on top" of current market - or does that high percentage of shorting mean the bond managers should be managing other fund types if they can't find any bonds that will do well in this market? : : : ... have a target allocation, use an Excel spreadsheet, do quarterly updates, use M* figures because it's easy to grab a batch of them without much trouble, and don't get too anal about it (because M* isn't always exactly right anyway). : : I use two categories for bonds and other non-stock investments: intermediate-long-other and short-cash, including things like Hussman's funds, gold holdings, and foreign bonds in "interm-long-other," and counting a stock fund's cash holding in the "short-cash" category only if a manager makes a habit of keeping 10% or more in cash. : : I also keep up with the percentages of foreign stock funds by major world region; to me, those are important statistics when you have a large percentage in foreign, as I do. : : Good luck - AJ : : : If one decides on a Portfolio holding 40% bonds, then also has some Balanced, Blend or Large/Small Caps funds that also include bond percentages, should the percentage of bonds held by these funds be included in with the total percentage of the all-bond part of your portfolio?
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