FundReveal - The Predictive, Fresh Approach to Finding the Best Mutual Funds

FundReveal FOBAX analysis complementing Mutual Fund Observer, 4/1/2012

March 31st, 2012 · Mutual Fund Performance Measures: Old and New

FOBAX FundReveal Analysis

March 28, 2012

 

FOBAX is a well managed, safe, low risk, “Moderate Allocation” fund.

  • Its low volatility, high return performance is visible in cumulative 5 year, latest cumulative one year and latest quarter analysis results.
  • Its Persistence Rating (PR) is 60, indicating that it has maintained an “A-Best” rating (Higher ADR and lower Volatility than the S&P 500 index) over most of last 20 quarters.
  • This is also evident from the rolling 20 quarters Risk-Return ratings which have been between “A-Best” and “C-Less Risky.”
  • In general, it tends to have lower ADR than S&P 500 in up markets (UMER = -10%), measured over the last 20 rolling quarters, but higher ADR than S&P 500 in down markets (DMER = +21%).  The benefit of low volatility and high positive DMER is evident from the fund’s total return performance in the crash year of 2008 during which FOBAX experienced a loss of 20% versus a market loss of 38% in the S&P 500 index.

 

FundReveal Measure

Cum 5 Year

S&P 500

Cum 5 Year

FOBAX

Cum 1 Year

S&P 500

Cum 1 Year

FOBAX

Latest Quarter

S&P 500

Latest Quarter

FOBAX

2008

S&P 500

2008

FOBAX

ADR

7%

10%

11%

15%

47%

35%

-15%

-14%

Volatility

21%

13%

20%

13%

10%

6%

27%

14%

WCR

-14%

-3%

-9%

2%

37%

28%

-41%

-28%

RR Rating

-

A

-

A

-

C

-

A

# Better Funds

-

182

-

204

-

56

-

4011

To learn more about the FundReveal approach and FundReveal products go to www.fundreveal.com

See the Mutual Fund Observer analysis at www.mutualfundobserver.com

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FundReveal MASNX analysis complementing Mutual Fund Observer, 4/1/2012

March 31st, 2012 · Mutual Fund Performance Measures: Old and New

MASNX FundReveal Analysis
March 28, 2012

MASNX has been well managed, and exhibited low risk, relatively low return behavior during its short existence.

• MANSX’s inception date is September 30, 2011. We have analyzed 126 market days, based the last 2 rolling quarters. The daily FundReveal information makes it possible to get an idea of how well the fund is being managed.

• Despite its short existence, the daily returns produced by the fund indicate the effectiveness of the fund investment decision-making.  It has exhibited low volatility, low relative return performance in the last 2 quarters.The multiple team management structure seems to be delivering its objective.

FundReveal Measurements

We looked at the latest 2 quarters (63 market days each).  The results for these quarters are as follows.  Numbers in parentheses are those for S&P 500:

Rolling Q2:  9/28/11 – 12/27/11 

Average Daily Return – ADR = 9% (42%),  Volatility = 3% (28%),  Worst Case Return -WCR = 6% (15%),

Number of Better Funds = 34, Risk Return Rating – RR = C

Rolling Q1: 12/28/11 – 3/27/12: 

ADR = 15% (47%), Volatility = 2% (10%), WCR = 14% (37%),

Number of Better Funds = 11, RR = C

Conclusion: MASNX — How well is it being managed?

Very few funds have higher Average Daily Return (ADR) and lower Volatility than MASNX.  This is shown in the very low “Number of Better Funds” for the 2 quarters, 34 and 11.  (Number of Better Funds means the number of funds that have both lower risk and higher return).  The fund has a Risk-Return Rating of C, “Less Risky”.  This is consistent with the fund’s objectives.  Investors should be aware of the likelihood that they will likely lag the S&P in Average Daily Return.  However, the fund will most likely perform well in down markets, as evidenced by its much higher Worst Case Return than the S&P.

If an investor could consider other funds with slightly higher risk (Volatility), there are many alternatives available in High Yield Bond, Conservative, World Allocation and other sectors. This can be best explored by using the FundReveal Advanced Screener that allows users to search the database for all funds that fit their own risk-return criteria.

Qualification – Clearly, the fund is very new, and any decisions based on this preliminary analysis would need to be carefully observed. Many times, fund managers start with a set of securities in their portfolio that meet strategic goals under certain circumstances. As the market changes, and pressures to perform against their internal benchmarks increase, the fund manager may focus on short-term objectives. The resulting daily buying and selling can add marginal returns if conducted skillfully (or luckily) and increase ADR, but it will almost certainly increase volatility. Given the limited track record available, we recommend monitoring MASNX’s ADR and Volatility monthly.

For more information about the FundReveal approach and FundReveal products go to www.fundreveal.com

See the Mutual Fund Observer analysis at www.mutualfundobserver.com

 

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FundRevealSM Persistence Rating

February 28th, 2012 · Mutual Fund Performance Measures: Old and New

FundRevealSM Persistence Ratings

The persistence Rating (PR) gives the investor an additional edge in finding the best mutual funds. It indicates the likelihood of a fund producing “A” results, beating the S&P 500 on both risk and return measurements.

FundReveal out–of-sample, forward testing simulation demonstrates the value of investing only in “A” category funds. Funds that performed in the A category in the preceding year have a higher probability of outperforming the S&P in total return in the upcoming year. Understanding fund persistence is the next step.

The persistence Rating (PR) gives the investor an additional edge in finding the best mutual funds. It indicates the likelihood of a fund producing “A” results, beating the S&P 500 on both risk and return measurements.

PR values range from 0 (no persistence) to 100 (highest persistence). The highest values observed in practice have been 85. As a general rule, PR values of 55 and above provide a strong indication of category A results. PR is calculated daily as a rolling number over the last 20 quarters.

Investors can see for themselves how high-persistence funds have remained in the “A” rating over many different quarters, while low-persistence funds have moved between different ratings.

A high PR does not mean a fund will maintain an “A” rating forever. First, PR is an indication of likelihood, not a guarantee of results. Second, things change; investors need to monitor fund performance at least annually, but preferably more frequently, and adjust for changes.

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YourOldMoney – a tax saving opportunity

February 18th, 2012 · General Information

YourOldMoney is a web-based service that can be very useful for individual investors, advisors and accountants — especially during tax filing.  It finds the cost basis for your old securities (stocks, bonds and mutual funds) for which you know the number of shares, but can’t find any record of the purchase price.  Without the cost basis, if an investor were to sell the security, tax due will be on the entire sales proceeds, without any deduction of the original cost of purchase.  This can mean a big chunk of money paid to Uncle Sam — all due to a missing record of the purchase price of the security!  So what Youroldmoney.com does is to combine cost basis calculations with an investor acceptance document.  YourOldMoney streamlines discovering and documenting lost cost basis, all in compliance with the SEC.

Take a look at www.youroldmoney.com and see for yourself!  FundReveal customers save 10% using discount code FundReveal.

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InvestmentNews features FundReveal

February 6th, 2012 · Fundreveal in the news, Mutual Fund Investment Decision-Making Process, Mutual Fund Performance Measures: Old and New

The press is paying attention to FundReveal’s capability to find the best mutual funds!  InvestmentNews, a prime internet and print newsletter, serving Financial Advisors recognized FundReveal’s capabilities in it’s most recent issue.

See it at “Past performance may be a harbinger for future, after all.” The author, Jeff Benjamin, is a Senior Editor at InvestmentNews.  In the article he describes the FundReveal approach at a high level, noting the combination of Average Daily Returns and the Risk (volatility) of those returns as key. He also speaks to the demonstration of the FundReveal that shows the approach beating the S&P consistently over the last 10 years.

 

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FundReveal in the news: Global Talk Radio interviews Dr Ani Chitaley

February 2nd, 2012 · Mutual Fund Industry, News Room

Global Talk Radio contributed to getting the FundReveal message out recently. They interviewed our President and Head of Research, Dr. Ani Chitaley on January 21st. You can hear the interview here.  In the interview Dr Chitaley describes the state of analytic support in the mutual funds industry and how the FundReveal tool addressed the need for useable information for investors.

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Looking Back Again – 2011 “Kiplinger 25″ Mutual Fund Recommendations

January 27th, 2012 · FundReveal predicts results, Mutual Fund Performance, Mutual Fund Performance Measures: Old and New, Recommendations from the media - our comments

In our last post we analyzed the 2011 Kiplinger Equity Fund recommendations and bond fund recommendations published in January 2011.  To clarify, these recommendations were published in Kiplinger and are the recommendation of Steven Goldberg, a regular contributor to Kiplinger.  They overlap with the “Kiplinger 25:  Our Favorite No-Load Mutual Funds for 2011,”  published in April of 2011, a list that includes some, but not all of the Goldberg recommendations.  A number of customers were interested in seeing an analysis of the Kiplinger 25.  So, here it is.

The results are remarkably similar.  Investing in the FundReveal Best Funds on the Kiplinger 25 list would have delivered significantly better returns than investing in the entire list.  Kiplinger published its own analysis early on January 3, 2012, “A Strange 2011 for the Kiplinger 25.”

The FundReveal Best Funds on the Kiplinger 25 list delivered 5.37%,  6.27% better than the Kiplinger average.  The “best funds” had a FundReveal Risk Return Rating of A in 2010:  AKREX, BBTEX, FCNTX, FPACX, VDIGX, and DLTNX.  So, if you were viewing these Kiplinger recommendations in January of 2011, you could invest in the FundReveal Best Funds, those with an A rating, and would have benefited.  As in the analysis of the Goldberg recommendations, the FundReveal Worst Funds (Risk-Return rating D) performed badly in 2011.  DODGX  returned -16.58% and HIINX returned -12.4%.

What does this mean now?  The funds below all had FundReveal A Risk-Return Ratings for 2011

  • Akre Focus,
  • BBH Core Select Fund
  • Fidelity Contra,
  • Fidelity Fidelity Low Priced Stock,
  • Doubleline Total Return Bond Fund
As demonstrated in our overall analysis of the market from 2000 through 2010, funds with An Risk-Return rating have the greatest likelihood of outperforming the market.  Consider investing in the 5 funds above that have A ratings

Here are the funds that Kiplinger recommended as best funds for 2011:

Kiplinger 25 2011
FundReveal
All Kiplinger Previous Year FundReveal FundReveal
Recommendatns A Funds Previous Year Current Year
Begin 2011 End 2011 Total Return % Total Return % RR Rating RR Rating
2011 2011 2010 2011
S&P 500 1257.6 1271.87 1.13%
AKREX Akre Focus 12.11 13.45 11.07% 11.07%    A    A
BSCFX Baron Small Cap 23.3 22.93 -1.59%    B    B
BBTEX BBH Core Select 14.19 14.89 4.93% 4.93%    A    A
DODGX Dodge & Xox Stock 107.25 101.64 -5.23%    B    D
FCNTX Fidelity Contrafund 68.21 67.46 -1.10% -1.10%    A    A
FLPSX Fidelty Low Priced Stock 36.18 35.73 -1.24% -1.24%    A    A
FPACX FPA Crescent 26.11 26.78 2.57% 2.57%    A    C
MERDX Meridian Growth 41.62 41.63 0.02%    B    D
PRFDX T Rowe Price Equity Income 23.48 23.06 -1.79%    B    B
PRSVX T Rowe Price Small Cap Value 34.34 34.48 0.41%    B    D
POGRX Primecap Odyssey Growth 15.28 14.94 -2.23%    B    B
VDIGX Vanguard Dividend Growth 14.17 15.42 8.82% 8.82%    A    A
VASVX Vanguard Selected Value 18.64 18.59 -0.27%    B    B
HACMX Harbor Commodity Real Return 7.46 6.89 -7.64%    B    C
MERFX Merger 15.36 15.59 1.50%    C    C
DODFX Dodgne & Cox Internatl Stock 35.05 29.24 -16.58%    D    B
HIINX Harbor International 59.37 52 -12.41%    D    D
OAKGX Oakmark Global 22.64 19.86 -12.28%    B    D
PRMSX T Rowe Price Emering Markets 35.58 28.51 -19.87%    B    D
DODIX Dodge & Cox Income 12.7 13.3 4.72%    C    B
DLTNX Doubleline Total Return 10.09 11.02 9.22% 9.22%    A    A
FLTMX Fidelity Intermed Muni Income 9.68 10.45 7.95%    C    C
HABDX Harbor Bond Institutional 11.79 12.19 3.39%    C    C
LSBRX Loomis Sayles Bond 13.43 13.88 3.35% 3.35%    A    C
VSFTX Vanguard Short-Term Invest Grd 10.44 10.64 1.92%    C    C
Average Total Return -0.89% 5.37%
Difference – FundReveal (+5.37%)  and the Kiplinger 25 (-.89%) = 6.27%

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Looking back: Kiplinger recommendations for best mutual funds of 2011

January 23rd, 2012 · Mutual Fund Performance, Mutual Fund Performance Measures: Old and New, Recommendations from the media - our comments

Many FundReveal users find that the tool provides a valuable screen for the recommendations they see on the web or in print

Here is an example.  We analyzed the 2011 Kiplinger Equity Fund recommendations and bond fund recommendations published in January 2011.

The Kiplinger recommendations delivered lower total return than the S&P 500, -1.97%.  The FundReveal best funds on the Kiplinger list delivered 3.56%, 5.5% better than the Kiplinger average.   Those are funds that had a FundReveal Risk Return Rating of A in 2010:  FCNTX, FPACX, and DLTNX.  So, if you were viewing these Kiplinger recommendations in January of 2011, you could invest in the FundReveal Best Funds, those with an A rating, and benefited.  Also noteworthy are the funds that performed badly on the list, OAKIX (-14.56%) and PRMSX (-19.87%).  Both of these funds had D Risk Return Ratings for 2010.

What does this mean now?  Fidelity Contra and Doubleline Total Return Bond Fund both had Risk Return Ratings in 2011 of A, Best funds.  FPA Crescent Portfolio went from an A Risk Return Rating in 2010, to a C Rating in 2011.  FCNTX and DLTNX have a high likelihood of outperformance in the coming year, 2012.  VWITX moved from a C RR rating to an A  RR rating, so it also has a high likelihood of outperformance.

(Note that while this is a reconstruction of the past, the only FundReveal information used is that available at the time that the Kiplinger recommendations were published.)

Here are the funds that Kiplinger recommended as best funds for 2011:

FCNTX   Fidelity Contrafund

OAKIX   Oakmark International Fund

FPACX   FPA Funds Trust, FPA Crescent Portfolio

POGRX  PRIMECAP Odyssey Growth Fund

PRMSX  T. Rowe Price Emerging Markets Stock Fund

VWITX  Vanguard Intermediate Tax-Exempt

PUBAX  PIMCO Unconstrained Bond Fund

DLTNX  Doubleline Total Return Bond Fund

PLBDX  Emerging Local Bond Fund

The results:

All Kiplinger Recommended Total Return % FundReveal Previous Year A FundsTotal Return % FundReveal  2010 Risk-Return Rating FundReveal 2011 Risk-Return Rating
S&P 500 1.13%
FCNTX -1.10% -1.10% A A
OAKIX -14.56% B D
FPACX 2.57% 2.57% A C
POGRX -2.23% B B
PRMSX -19.87% B D
VWITX 9.61% C A
PUBIX 0.09% C C
DLTNX 9.22% 9.22% A A
PLBDX -1.47% C C
Average Total Return -1.97% 3.56%

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Finding the best funds: Quick start with FundReveal Advisor tools

January 17th, 2012 · Mutual Fund Investment Strategies, Mutual Fund Performance, Mutual Fund Performance Measures: Old and New

To help you get started quickly with your subscription or free trial, here are a few tips on interpreting the analysis available in the Advanced Portfolio Analyzer, and the measures available for the funds seen through the Advanced Portfolio Screener.

1.Funds that have high likelihood of beating S&P 500 in the “near future” have these characteristics:

a)   Average Daily Return (ADR) greater than the  S&P 500,

b)   Worst Case Return (WCR) greater than the  S&P 500,

c)    Volatility less than the  S&P 500,

d)   Risk Return Rating (RR) rating = A,

e)    Persistence Rating PR > 55.

Statistical out-of-sample, forward testing shows that funds meeting these criteria have high likelihood of beating the S&P 500.

2.  To get started input the funds you want to analyze (funds held or those you are candidates)

  • View the summary reports for these funds considering criteria a) – e) above.
  • Additional information
    • Fund Universe Comparison Graph gives a visual snapshot of funds within entire universe
    • Performance Time Series for last 20 rolling quarters
    • Risk-Return (RR) ratings (A, B, C, D) for last 20 rolling quarters indicates RR performance variation and trends over time

3.  Use the Advanced Portfolio Screener to find new funds that meet the criteria listed above in #1, a) – e).

4.  Monitor portfolios regularly examining changes in the behavior of the key measurements.

 To learn more about predictability and advantages of our risk-return measures, please go to Home >> Advisor icon >>  ”Learn More.”

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Higher dividends another indication of recovery

January 11th, 2012 · General Information

Rising Dividends Expected in 2012 as Companies Woo Investors  – New York Times, January 11, 2012

“The idea is beginning to percolate a little bit in management suites that paying a bit higher percentage of your earnings in dividends might be a way to a higher stock price and better benefits for shareholders over all,” said Edward F. Keon, portfolio manager for Quantitative Management Associates.  This observation, coupled with the observation that rising dividends frequently accompany recovery is yet another indication that the US economy is recovering.  Good news for mutual fund investors as it portends a broad recovery in which all funds will benefit.

This graph shows clearly the uptick between 2009 and 2011, with US company dividends nearly at pre-recession levels.

 

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