Episode 422: The BCI Fund, More Cowbell, Fidelity's Share Lending Program And Portfolio Reviews As Of May 9, 2025
May 11, 2025
Listeners are in for a treat as the hosts delve into comparing two commodity funds, PDBC and BCI, revealing hidden differences that can impact returns. They also explore the benefits of small cap value stocks, emphasizing their role in diversifying portfolios, especially during downturns. Fidelity's new gold lending program sparks lively discussions about risks versus rewards, all while the team maintains a humorous tone. Plus, there’s a nod to charitable giving efforts, keeping the conversation engaging and socially conscious.
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volunteer_activism ADVICE
Consider Passive BCI Commodities Fund
Consider BCI as a viable passive commodity fund option with a low expense ratio and no K-1 tax forms.
Evaluate commodities ETFs by expense, management style, volume, and tracking error before choosing.
insights INSIGHT
Small Cap Value Cushions Downturns
Small cap value stocks offer diversification benefits by cushioning growth stock downturns.
In 2022, value stocks ranged from -10% to +10%, easing portfolio volatility and boosting rebalancing opportunities.
volunteer_activism ADVICE
Try Fidelity Lending Program Cautiously
Try Fidelity's fully paid lending program cautiously for small income but low impact.
Monitor any trade delays and be aware of counterparty risks before committing fully.
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Looking for that perfect balance between return potential and downside protection? This episode delivers practical insights for DIY investors navigating today's complex markets.
We dive deep into commodity ETFs as listener Ed asks about PDBC versus BCI for his portfolio. The comparison reveals surprising differences in expense ratios, management approaches, and tracking errors that could significantly impact your returns over time. Frank shares why he's personally shifted away from dedicated commodity funds toward managed futures for inflation protection.
The conversation then turns to small cap value investing, but with a crucial twist that many investors miss. Rather than focusing solely on whether small cap value will outperform the broader market, Frank emphasizes its diversification benefits during market downturns. The 2022 market crash provides a perfect case study: while growth stocks plummeted 30-50%, value stocks ranged from -10% to +10%, creating powerful rebalancing opportunities that can enhance long-term performance.
We also examine Fidelity's Fully Paid Lending Program, which allows investors to earn additional income by lending their securities. While the potential return seems modest (around 0.625% annually), we consider the counterparty risks and regulatory protections you might sacrifice.
The episode concludes with our weekly portfolio reviews revealing fascinating performance patterns in 2024. Gold continues to shine with a remarkable 26.81% year-to-date gain while the broader market struggles. This performance disparity highlights why thoughtful asset allocation matters more than ever for investors seeking to build truly resilient portfolios.
Whether you're managing a multi-million dollar portfolio or just starting your investment journey, these insights will help you navigate market volatility with greater confidence and clarity.
What's your approach to balancing growth and value in your equity allocation? Have you considered how different assets might interact during the next market downturn?
Risk Parity Radio