when funds have to sell, they will sell what they can (i.e. most liquid), not necessarily what want to. the bid/ask spread on some of this non-agency prime paper can be wide. I fear maybe liquidity was provided to the first ones off the ship and ones that remain will suffer from the forced selling of less liquid positions. when HF's are faced with events like this, they throw up a gate and redeem investors on a pro rata basis, to ensure orderly liquidation. not the case here. I have sold half and think will sell balance tomorrow.
I am a new investor in this fund - if any of you older hands have more info/advice as to the possible futures of this fund it would be helpful. I don't want to sell and am encouraged by your response to today's conference.
You raise a very good issue. The new Met West management addressed it today on the call without being prompted. They said they were very conscious of being fair to all shareholders and are absolutely not selling based on what is most liquid. Brian Whalen (I think that's right) said the combined team had been rank ordering securities in terms of their idea of price versus value on both sides - agency and non-agency, and were selling from the bottom of the list. He said they were getting prices that they expected, right in line with how they were marked.
I read where Gundlach said the bond sales by TCW have gone well because buyers know his team had picked the securities so were clamoring to buy them. That sounds plausible to me. I don't think most buyers have the kind of systems and expertise that were described on the call today for both TCW and Met West.
Overall, I was very impressed with the presentation today. I was on the edge of selling or reducing my position but based on what I heard today and what I know of Met West, I think I'll hold until I see where Gundlach turns up and if there is a low cost way to invest with him. I don't think there will be a huge difference in performance between Gundlach and this new group over time so I wouldn't even consider paying a load or a high expense ratio.
To be very honest, Gunlach is not my cousin or anything that I get so pi*ed about and start moving my money irrationally. I don't care who sits there on the top as long as they produce for me. What I heard today and read about this new team I think they not just some goofballs taking over this huge fund. They have quite a track record as well. So, if people want to bail before a dividend in December that is their business. More for me. :) I think this fund will be just fine in the near future.