Technical Analysis Mutual Fund
A very rare occurrence in the mutual funds sales world circa 2009, a long-only strategy with no track record, just raking in the dough.
John Hancock Technical Opportunities Fund (JCTAX),[link] is consistenly pulling in $1 million a day, despite a 5% front end load (or I guess maybe because of it) and a 2.05% expense ratio.
JCTAX: http://www.jhfunds.com/Fund/PortfolioMonthlyHoldings.aspx?FundID=2Y30&ProductType=MutualFund&ClassCode=A
Now that we have had 135 long/short funds open since ‘06 and PM’s/wholesalers/fin. media all had their shot at explaining the value of uncorrelated assets since they could raise money there maybe they all actually learned something and realized that the most intelligent and logical thing to do is put the long-only equity money across index ETF funds, even the fixed portion, wont really make difference over most time-frames.
And thus, the only funds you should be looking at are strategies that you could not come close to implementing on your own and/or have low/negative/nil correlation with the market.
More: (some good tidbits on MF distribution/how shops are run)
• Only one other U.S. MF the $8.6 million Huntington Technical Opportunities Fund begun in May 2008, uses technical analysis exclusively.
So you can see the difference in distribution - never heard of Huntington Technical Opportunities and despite being part of a relatively large bank, it only has $8.6M in assets in about 15 months of life. Meanwhile the John Hancock fund, with an army of brokers pushing a product (to share in the load) can acquire that much within 9 days. If you are curious the Hutington fund is down 24% in the past 1 year period and has a whopping 2.94% expense ratio. (from it's holding list it simply holds various ETFs - which makes sense since that seems to be all anyone is doing nowadays when not speculating in Fannie Mae or AIG)
What was the impetus at John Hancock? One of the reasons actually is one of my main beefs with the industry - the fact a cash holding is considered "wrong", when in fact it can be a "position".
• Hartstein developed a fund that could shift all its money out of equities after attending a conference of financial advisers at the Ritz-Carlton in Boston in January. “Listening to those folks talk about their frustrations about managers not being able to raise cash, I came back from that and starting asking, ‘Who out there has a strategy that we could leverage, that has the flexibility to raise cash?’” he said.
The more alpha-centric strategies, the better, it will seem very obvious in some years down the road. I picture the 401k plan in the next 20 years stocked with 20 different managers who all did 10% annualized for multiple years with different investment styles. (not long-only, stay fully invested, a.k.a vanilla style box options)
Hat Tip: Fund My Mutual Fund
John Hancock Technical Opportunities Fund (JCTAX),[link] is consistenly pulling in $1 million a day, despite a 5% front end load (or I guess maybe because of it) and a 2.05% expense ratio.
JCTAX: http://www.jhfunds.com/Fund/PortfolioMonthlyHoldings.aspx?FundID=2Y30&ProductType=MutualFund&ClassCode=A
Now that we have had 135 long/short funds open since ‘06 and PM’s/wholesalers/fin. media all had their shot at explaining the value of uncorrelated assets since they could raise money there maybe they all actually learned something and realized that the most intelligent and logical thing to do is put the long-only equity money across index ETF funds, even the fixed portion, wont really make difference over most time-frames.
And thus, the only funds you should be looking at are strategies that you could not come close to implementing on your own and/or have low/negative/nil correlation with the market.
More: (some good tidbits on MF distribution/how shops are run)
• Only one other U.S. MF the $8.6 million Huntington Technical Opportunities Fund begun in May 2008, uses technical analysis exclusively.
So you can see the difference in distribution - never heard of Huntington Technical Opportunities and despite being part of a relatively large bank, it only has $8.6M in assets in about 15 months of life. Meanwhile the John Hancock fund, with an army of brokers pushing a product (to share in the load) can acquire that much within 9 days. If you are curious the Hutington fund is down 24% in the past 1 year period and has a whopping 2.94% expense ratio. (from it's holding list it simply holds various ETFs - which makes sense since that seems to be all anyone is doing nowadays when not speculating in Fannie Mae or AIG)
What was the impetus at John Hancock? One of the reasons actually is one of my main beefs with the industry - the fact a cash holding is considered "wrong", when in fact it can be a "position".
• Hartstein developed a fund that could shift all its money out of equities after attending a conference of financial advisers at the Ritz-Carlton in Boston in January. “Listening to those folks talk about their frustrations about managers not being able to raise cash, I came back from that and starting asking, ‘Who out there has a strategy that we could leverage, that has the flexibility to raise cash?’” he said.
The more alpha-centric strategies, the better, it will seem very obvious in some years down the road. I picture the 401k plan in the next 20 years stocked with 20 different managers who all did 10% annualized for multiple years with different investment styles. (not long-only, stay fully invested, a.k.a vanilla style box options)
Hat Tip: Fund My Mutual Fund
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