The Riskalyze Report: Advisors Dump Tactical, Bank Loan Funds

My friends at Riskalyze share the stocks and funds that advisors all over the country have used in their clients’ accounts each week. This data has been aggregated from across the client accounts of the thousands of advisors who use the software. Most of it comes directly through the third-party custodians where advisors’ assets are held. I hope we can uncover interesting trends for you each week…


Week of November 30th – December 5th 2014:

Winners = top investments purchased by advisors for client portfolios that week
Losers = investments that advisors sold out of in client portfolios that week

Winners (advisor flows TO these investments increased):

  • DFA Funds (multiple)
  • Telecom (T and VZ)

Losers (advisor flows FROM these investments increased):

  • Floating Rate (BKLN, LSFYX, etc)
  • Mainstay Marketfield (MFLDX)


Josh here – As tactical / alternative strategies go, Mainstay is one of the last men standing in terms of having any credibility with financial advisors. The other two former advisor darlings in the space are contending with either disastrous 2014 performance or an SEC investigation. By contrast, Mainstay looks like a choir boy. Their Marketfield fund, the largest “liquid alt” extant, saw some notable outflows this week, however.

Advisors also sold floating rate funds, including the Bank Loan ETF which was launched as a late entrant into the Chase for Yield sweepstakes. BKLN was billed as a way to get yield and not take duration risk – most of their loans roll over pretty quickly allowing the portfolio’s holdings to “reset” at gradually higher rates, if you will. At least that’s the basic idea. The problem is, with junk bonds taking out the October panic lows, people all of a sudden care about defaults and credit risk in the high yield space. Bank loans can be, in a way, junk bonds on steroids in a bad environment.

A word about Riskalyze:

In my practice, we use Riskalyze software tools to help assess clients’ true risk tolerance and to test portfolio configurations that match up accordingly. It’s changed our practice for the better, as I explain here.

Check it out today!

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