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How does Fixed Income 2 (FX2) portfolio stack up against comparable high-yield bond mutual funds?

Well, we might have a big surprise for you.

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

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We estimate that Morningstar tracks the performance of and benchmarks close to 800 High-Yielding Bond Mutual Funds, and on October 19, 2017,  this is how FX2 compared to Morningstar’s high-yield bond database:

YTD  

Year-to-Date, FX2 returns were up 16.28%, and outperformed every high-yield bond mutual fund that was listed.  The best performing high-yield bond fund we could identify on Morningstar in YTD return was Fidelity Capital & Income, up 10.40%.

  • FX2 Beat the top performing high-yield bond mutual fund in YTD return by 56.53 %

 Trailing 1 Year

For a 1 Year period, FX2 returns were up 17.80%, outperforming all high-yield mutual funds that were listed.  The best performing high-yield bond fund in Trailing 1 year return that we could identify on Morningstar was Catalyst/SMH High Income I, up 15.50%.

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economy

FX2 Year-To-Date up 18.10 % – Since Inception FX2 is up 9.71 % – Trailing 1 Yr Return is up 20.69 %

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Click to see FX2 most recent performance FX2 Master (Summary) 09_30_2016 to 09_29_2017.pdf

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Click to see FX2 most recent benchmark performance CFX2 Master (Summary) 09_26_2016 to 09_25_2017.pdf

FX2 | Fixed Income2.com Is A High Yielding, Short Term, Low Cost Managed Income Portfolio. Designed to earn you both a higher fixed income and your money returned back!

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FX2 Slide Deck

cropped-fx2coverCapture.pngOur most recent Fixed-Income2.com bond portfolio additions and reviews

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economy

High 7 – 8.5% Yields | Fixed-Income2.com

FX2 | Fixed-Income2.com targets an 8 – 8.5% yield with our 3+ average maturity that is far better than the current 0.90% range that the three year government bonds are currently paying.  That works out to about an 800% increase in fixed income, by switching to our services.

Based on the above treasury yield, if you have a $1,000,000 portfolio in US government bonds for three years, your yearly income would be $9,000 dollar. Or about  $758.33 dollars per month, hardly fitting life style for a millionaire.

Using our midpoint 8.25% yield with a similar maturities using the same $1,000,000 portfolio, the yearly income would be income $82,500. Or $6,875.00 dollars per month. Thus a higher yield can greatly increase your standard of living, in this case over 800%.

It’s simple: You worked hard to earn your money,  it’s time your fixed income worked as hard as you do ! Read more

finance

Higher Institutional Yields, and Diversified Portfolio’s | Fixed-Income2.com

FX2 | Fixed-Income2.com is able to access the much higher yielding global institution bonds. Whether this is because of our outstanding reputation or high internet presence, or because we often have major US and World bond firms contact us wanting our services and business isn’t clear. However it does put us in the enviable position to pick and work with the trading firms we think will provides better price and higher values for our clients.   Thus, we are able to shop the globe, often seeing much higher yielding bonds from a wide variety of counties, industries and services that most of our clients can’t find or purchase on their own. Thus we shop the world to find our clients the best bonds. Read more

Analytics

Targets up to 25% in foreign currencies | Fixed-Income2.com

The FX2 | Fixed-Income2.com portfolio targets up to  25% of our investments, in foreign currencies. FX2 is a high yielding bond portfolio designed to have some diversity away from the dollar, most if not all that diversity is from Canada.

Remember foreign currencies might and will increase the volatility in this portfolio, even though the added diversity could overtime reduce your overall portfolio risks. Many foreign currency bonds have very limited liquidity and the plan is to holding these very short term bonds to maturity. High yield, short maturities, with a very low fee, so our clients can continue to achieve their goals of higher cash flow while limiting their exposure to the US Dollar. Read more

Short 3.75 Year Average Laddered Maturities | Fixed-Income2.com

FX2 | Fixed-Income2.com portfolio is designed to protect our clients against inflation, with a focus on short term, maturity certain bonds.

Historically, interest rates move in 30 year cycles. Thus interest rates have been falling for about 30 years until the 4th quarter 2012. Not only did interest rates decline for about 30 years, they hit almost zero, an artificially low level. This low level was caused by the Federal Reserve, in a effort to keep short term interest rates at about zero while at the same time pumping large amounts of new money into the system to stimulate the US economy.

We have learned though history that this kind of activity, repeated over a long period of time, could and will have negative long term effects, for example not only helping interest rates to rise, but often creating a similar duration and magnitude opposite swing. Just like a clock pendulum. When you move a clock pendulum to the left many degrees and then let go it will come close to the same movement past center to the right before it begins to find it’s equilibrium,  this in  finance is this effect is called Regression to the means.  So if interest rates are artificiality low with a large pumping of new money, now for over 5 years, at some point this could cause an opposite effect proving a equally overly high interest rates, for about the same 5 year time period. Either way we believe interest rates over the foreseeable future will be rising and the best way to deal with this is the keep your maturities very short and certain, and your bond coupons high. Read more

finance

High Level of Fiduciary Service | Fixed-Income2.com

 At FX2 | Fixed-Income2.com we are a fiduciary service firm and very proud of it!

We put our clients interest first. Our service is excellent, and we are honest, hard working blue collar type workers who understand the needs and concerns of our clients. We will explain in writing the risk and rewards. We believe things will be tough, that there will be many economic challenges ahead, and we are working hard on our plans to better position our clients to better evade most if not all of these future issues. We are only paid by our clients and take zero soft dollars, kickbacks, or trading fees. It is important to us to structure our company in a way that is fundamentally right for our clients. This is in our mind just as important is our commitment to provide a fiduciary selection and investment model for our clients.

To take to the next step, the companies we own, vendors that services us, and employees we work with are all work under our fiduciary model. We work hard to run all aspects of our business in a fiduciary role.

We believe ethics is important! Read more

economy

Low 0.50 % Advisory Fees | Fixed-Income2.com

At FX2 | Fixed-Income2.com we recently spoke to a prospective client, he was being charged a 1.5 % fee, to have his money managed, and the advisory/broker had put him in many income mutual funds, each with an additional 1% additional fee.

Thus this prospective clients fees were over 2.5% before the trading and other hidden costs, and these fees were exceeding his returns!!!!! In this very low income environment, this was just plain wrong! The manager and mutual funds were making good returns, while taking no risks, and our future clients was making less money than his fees, causing him to lose money while he was taking all the risk.

To make matters worse this was was for his future retirement.

Our bond fee is 0.50% and in this case only 1/5 or 20% of the total fee of what he was being charged. Our income generation has greatly surpassed what he was getting, and he claims we give him far superior services.

To summarize: The income from his portfolio is over 3 times higher, his fees/costs dropped 80%, and he is making about 8% net off his retirement account instead of losing, plus he is getting better service.

Our fees are almost always below our competitors advisory fees, and we give one to one personal fiduciary services.

The FX2 | Fixed-Income2.com portfolio is designed with low fees to give you a higher return. We are able to keep fees very low with a high degree of service. How do we do this? first we limit our overhead. We have a large internet reach business with one central low cost location / a building in-which we own. We ran from the high rent offices, one in every city model, knowing the clients would eventually would have to pay for this. We aggressively utilize the internet to provide a higher level of transparency, and we are immediately available by Skype. We charge a very low fee and we know of no firms that provide such a high degree of income service that we have provided now for many years.

We are proud to provide a unique and special income service all at a very low fee. Read more

Return of Principle is Important | Fixed-Income2.com

 FX2 | Fixed-Income2.com, From day 1 this FX2 portfolio is designed to protect and return our clients principle. As with any investment there are no guarantees, however our track records speaks for itself. We have installed a strategy that has worked extremely well in some of the most difficult markets we have ever seen, we buy high yielding short bonds and hold them to maturity. We all know that economically, the last 5 years have been some of the hardest times American citizens of our generation have ever witnessed, and in other parts of the world its been even worse.

To protect our clients principle we do our own research, first focusing on the companies position, the industry the company is in, and the position of the company inside that industry. We are attracted to monopolies with few if any direct competitors, we shy away from,  if not run from commodity type service companies that provide a easy to repeat services and have hundreds if not thousands of direct competitors. It’s a simple strategy. If your a betting man and want to insure your horse will come in first or second place, what do you do? It’s easy! You just make sure there are only two horses running in the race, you chance of surviving if not winning is far higher.

We like companies with few direct competitors, also known as natural monopolies.  Companies with few competitors often have higher margins, lower level of debt, and we can find bonds often outside the US with much greater yields in institution sizes. That’s step one. Next we review the balance sheets, cash flow, cash and profitability against their debt levels and payments. Our core focus of this research is to help our clients receive their principle back. Read more