Durig Fixed Income 2 (FX2) Portfolio Review: December 2017

For many years, we have emailing our Durig Capital Fixed Income FX2 high-yield bond ideas as they were added to our FX2 client portfolios.  The relatively standard benchmarks shown below are compared to the Year-to-Date (YTD), Trailing 1 year, Trailing 3 year and Trailing 5 year returns provided by the High-Yield Bond Mutual Fund database provided by Morningstar.

We estimate that Morningstar tracks the performance of and benchmarks close to 800 High-Yielding Bond Mutual Funds, and on December 7th, 2017, this is how our clients aggregated FX2 portfolios compared to Morningstar’s high-yield bond fund database:

YTD   

Year-to-Date, FX2 returns were up 14.66%, and outperformed every high-yield bond mutual fund that was listed. The top five performing high-yield bond funds we identified on Morningstar in YTD return were:

FX2  up 14.66% YTD

1. Fidelity Capital Income up 10.72%
2. Fidelity Advisor High Income Advantage I up 10.38%
3. Deer Park Total Return Credit I up 10.10%
4. Fidelity Advisor High Income Advantage M up 10.08%
5. Fidelity Advisor High Income Advantage A up 10.02%

  • The average YTD return among the high-yield bond mutual funds listed was 6.13%
  • FX2 aggregated year-to-date returns were 139.15% above the average YTD return of the high-yield bond mutual funds listed

Trailing 1 Year

For a 1 Year period, FX2 aggregated returns were up 15.73%, outperforming all high-yield bond mutual funds that were listed.  The top five performing high-yield bond funds we identified on Morningstar for Trailing one year return were:

FX2  up 15.73% Trailing 1 Year

1. Fidelity Capital & Income Fund up 11.09%
2. DDJ Opportunistic High Yield Institutional up 11.09%
3. DDJ Opportunistic High Yield I up 11.06%
4. Diamond Hill High Yield Y up 10.91%
5. Victory High Yield Y up 10.87%

The average trailing 1 year return among the high-yield bond mutual funds listed was 6.97%

  • FX2 aggregated returns outperformed the average trailing 1 year return of the high-yield bond mutual funds listed by 125.68%

Trailing 3 Year

For a 3 Year period, FX2 aggregated returns were up 9.64%, outperforming all high-yield bond mutual funds that were listed.  The top five performing high-yield bond funds we identified on Morningstar for Trailing three year return were:

FX2  up 9.64 % Trailing 3 Year

1. Fairholme Focused Income up 8.34%
2. Artisan High Income Advisor up 7.55%
3. Artisan High Income Investor up 7.37%
4. T. Rowe Price US High Yield I up 7.26%
5. Angel Oak High Yield Opportunities Institutional up 7.14%

  • The average trailing 3 year return among the high-yield bond mutual funds listed was 4.54%
  • FX2 aggregated returns outperformed the average trailing 3 year return of the high-yield bond mutual funds listed by 112.33 %

Trailing 5 Year

For a 5 Year period FX2 aggregated returns were up 8.88%, outperforming all but one of the high-yield bond mutual funds listed. The top five performing high-yield bond mutual funds we identified on Morningstar for Trailing 5 year return were:

FX2  up 8.88% Trailing 5 Year

*1. Fairholme Focused Income up 9.16 %
2. Credit Suisse Strategic Income I up 7.34%
3. Fidelity Capital & Income  up 7.33%
4. Morgan Stanley Institutional High Yield I up 7.22%
5. Lord Abbett High Yield I up 7.19 %

  • The average trailing 5 year return among the high-yield bond mutual funds listed was 4.70%
  • FX2 aggregated returns outperformed the average trailing 5 year return of the high-yield bond mutual funds listed by 88.94 %

* Fairholme Focused Income I: Outperformed  Durig Capital FX2 for a 5 year period.  This is the first mutual fund to outperforming Durig Capital FX2 aggregated performance in a major category since covering our last three monthly performance reviews.

Past performance is no guarantee of future results. FX2 is a composite of individual (segregated) bond accounts comprised of individual bond positions, with return averages both higher and lower than the FX2 composite returns.  Individual (segregated) accounts are a different investment vehicle than bond funds, offering more easily customized asset allocation and tax accountability compared to having all the investments held in one single large pool.  To learn more, find us at: Durig Fixed Income 2