I first wrote about this fund last July. I said then that I did not think the fund made sense because of how limiting the strategy is. It was those limits that kept JENSX out of the energy and utilities sectors.
My past comments about this fund generated more hate mail than anything else I have ever written about. In fact it may have been the only hate mail I ever received.
Since that first post I am surprised that JENSX has only lagged by 2%. According to the article the fund has lagged the market by almost 7% annualized for the last three years.
One new thing I learned in the article is that a committee decides on big moves within the fund.
JENSX had a phenomenal 2000 when it was up 20% vs. a 9% loss for the S&P 500. A 29% spread is huge and I have to think accounts for most of the funds ten year track record which comes up as having outperformed 91% of its peers.
Different themes work at different times. A strategy that by definition can not rotate into certain themes makes no sense to me whatsoever.
The managers and defenders of the fund say you need to have a long term horizon and approach. OK, anyone out there think that after this run in energy peters out (don't know when that will be) we will have another one in the next 20 years?
5 comments:
Same thing can be said for Clipper fund and Oakmark Select fund. Different thems work for different times, well said!
Well if you look at the fund in a vacuum your post makes sense. However, as you you are aware, the most appropriate way to use funds is to provide the investor with access to different market sectors and strategies. I own Jensen and it has pained me the last couple of years. However, owning it has also allowed me to own other funds that specialize in things like commodities, international, REIT, etc. without throwing my total beta all out of whack. The key is the total return of the portfolio...not one element of the portfolio.
I assume asset allocation means collecting a diversified portfolio of market indices(or funds) to acchieve the collective returns while reducing the short term volatilities. To me, if I choose an actively managed Large value fund(such as JENSX) instread of a index fund, I expect it perform at least as good as the index or I will replace it. Holding a fund performing inferior to its index only reduce the overall return. It is just simple mathematics.
I certainly can't argue with the last comment. That is the exact decision I'm grappling with now. My one issue is that I'm not certain there is an Index fund that is as large cap biased as JENSX. Any suggestions?
Roger,
You may want to comment on this. I am not sure it is all right to name names. It is just less educational to name specific names than defining the process to search for the right fund. Right?
Post a Comment