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Thread: FI OEFs, what now?

  1. #1

    FI OEFs, what now?

    FI OEFs, what now?


    • FUND.....1 YR....YTD.....1 month(As of 09/09/2016)
    • Multi Sector fund
    • PTIAX.....7.4%....5.5%....0.3%
    • PIMIX.....6.5%....6.5%....0.5%
    • Bank loans
    • SAMBX....4.2%....8.2%....0.7%(=SFRAX)
    • EAFAX....4.8%....8.8%....0.9%
    • Mostly ST HY corp(for lower SD)
    • OSTIX.....5.2%....8.6%....2.0%
    • RSIVX.....3.4%....7.3%....0.6%
    • WHAAX.....6.5%....9.1%....0.0%(tactical HY)
    • HY Munis
    • NVHAX......6.8%....5.0%....0.3%..(ST)
    • NHMAX.....12.2%....8.4%....0.5%..(mid-long)
    • PHMIX.....13.0%....8.2%....0.5%..(mid-long)
    • Inter-Term Bond
    • VBTLX.....5.3%....5.4%....-0.5%..(=BND=index)
    • DBLTX.....3.6%....3.6%....-0.1...(mostly MBS)
    • DBLFX.....5.2%....6.1%....-0.2...(Gov+Corp+MBS)
    • GIBLX.....6.6%....6.8%....+0.1...(Gov+Corp+MBS)
    • BCOIX.....6.1%....6.8%....-0.2...(Gov+Corp+MBS)
    • Nontraditional Bond
    • PMZIX.....4.6%....4.1%....0.2% (mostly MBS)
    • EM+Global
    • FNMIX.....15.5%...16.3%....0.8%..(EM)
    • DBLEX.....10.4%...15.5%....1.5%..(EM)
    • TTRZX/TPINX (I don't like these for years)
    • Global allocation(heavy in bonds)
    • PGDIX.....7.7%....9.3%....0.5%..(global over 70% bond)
    • PAUIX.....9.9%....14.3%....0.2%..(global allocation, see details later)

  2. #2
    My responses below:

    1. When rates go up, bonds usually lose money. In 2 months the 10 year treasury went from 1.4 to 1.67. What to do now? me think, I want flexible funds and/or funds that worked well in the last 1-2 months but also in the last 6-12 months. Gundlachsaidinvestors should reduce duration in their portfolios, move money into cash and buy protection against volatility before rates rise and inflation picks up. That is the general consensus, and it seems to apply more to treasuries and investment grade corporates, than it does for many other categories. It seems that the 2013 temper tantrum reaction to rate increases was more broad based, and more severe, than what has occurred since then.
    2. The 2 miltisector bond funds worked well in most markets and these 2 complement each other but YTD both trail the category. I have less problem with PTIAX since it's an excellent ballast fund in this category but I expected PIMIX to do better with its HY+EM bonds. PTIAX risk/reward in the last 1-3 is better than PIMIX. It is difficult to generalize about multisector bond funds, because they reflect managerial prerogative about what kind of assets to hold, how much to stress interest rate risk in their portfolio, and how much to use more sophisticated investing strategies. PTIAX and PIMIX are very different kinds of multiector bond funds, with different factors affecting performance of each fund. There are not many multisector bond funds that I trust to handle both interest rate risk and credit risk these days.
    3. Bank loans worked well YTD. If rates go up, it's usually a good place to be. The category did well YTD regardless of rates movements. I don't tend to use Bank Loan funds much anymore as longer term investments--they have their place if you are good at market timing, but I don't trust they are much more than shorter term holdings.
    4. ST HY corp OSTIX worked very well lately and YTD because HY are doing well. HYG have higher correlation to stocks but while the SP500 went down -2.7% since 09/07 and HYG was down -0.5% both OSTIX+RSVIX were up...one month chart(change to 1-3 years).I don't much care for either OSTIX or RSVIX, but I do think there is a place in many portfolios for very conservative short duration HY bond funds--ZEOIX type funds are attractive for the more conservative investor.
    5. HY Munis are still the best risk/reward for YTD,1,3 years. This is one of my favorite categories, but I am still leary of longer duration HY munis although they have done very well since 2013. I like shorter duration HY Munis like NVHIX/NVHAX.
    6. Inter-Term Bonds- The index BND is down as expected. Several good choices but GIBLXshows its flexibility with good performance in up/down rates and is positive for one month + good YTD + 1 year performance + higher yield. Intermediate Bond funds are very varied and very difficult for me to generalize about. I tend to favor funds like BCOIX, DBLTX,etc. with strong managers.
    7. PMZIX as expected shows its flexibility in all markets with low risk+SD and IMO a better choice than DBLTX (for some investors). I also like its higher yield. I agree with this, but PMZIX is one the few nontraditional bond funds that has developed a good performance record over a more prolonged period of time. Most nontraditional bond funds are very inconsistent in their performance. DBLTX is more of a ballast oriented intermediate bond with relatively simple investment strategies, whereas PMZIX is a more sophisticated nontraditional bond fund and is not as good of a ballast fund as DBLTX. Kind of apples and orange comparisons with these 2 funds.
    8. EM+Global is more volatile sector. EM bonds are doing excellent, even in the last 1-2 months. DBLEX has less volatility(=SD). If you want to invest globally including bonds+stocks+MLP+alternative(see here), I like PGDIX for several years for its risk/reward. Again these two funds are very different kind of funds, with DBLEX using only EM bond funds, and PGDIX being a more risky multisector bond fund. I consider DBLEX as one of the better choices if you want a focused EM bond fund, but in general I would prefer getting my EM bond exposure through a quality multisector bond fund like PIMIX.
    9. PAUIX is a fund that used to be hot then cooled down and finally worked YTD. The manager, Arnott, invests now in non US stock + shorting US stocks + EM bonds and more. To see it's holding look here. If you look at the previous several years,PGDIX proved to be a better choice. I don't care for Arnott as a manager I can trust--he seems to be a stubborn multisector bond manager whose strategies and asset choices have made him a poster child for bad investment strategies, and bad asset choices. PGDIX is a better choice, but I would prefer PIMIX as my choice in this category.
    10. So what funds to own now? Generally, if both funds are close in risk/reward I would select the higher yield one. If you own mostly stocks then you need to own ballast bonds. The following is for investors with higher % in bonds, like me. First, the "easy" ones(core funds)...Multi=PTIAX+PIMIX...HY Muni=NHMAX or PHMIX...Inter=GIBLX(selected only one, see explanation at item6). Second, explore funds...Bank Loans=EAFAX...ST HY=OSTIX...EM=DBLEX(FNMIX is a good choice but I like lower SD, last Fri it lost -1.1% while DBLEX lost only -0.2%). If I want to add some stocks PGDIX is a good choice. I don't consider myself as good model for most investors. I am in retirement, stress preservation of principal, low risk, and competitive income bond funds. I hold only Muni funds for my taxable account, both investment grade Munis and HY Munis. I hold multisector bond funds, that are relatively low risk but pay a decent yield. I also hold some intermediate bond funds, primarily for ballast reasons. In general, I don't find alot of funds in any category that allows me to generalize about the category. My menu of acceptable bond funds to hold, is very selective, and stresses quality managerial performance for several years.

  3. #3
    As a retired and fairly conservative investor I feel very comfortable allocating approx. 70-80% of my portfolio to bond funds like PIMIX, PTIAX and GIBLX (IRA account), and to PRSMX and NVHAX (taxable account).
    They have excellent risk/reward profiles which is my primary criteria when selecting funds for my portfolio. PMZIX is another steady and very low volatility bond fund that has impressed me over the years.
    In general, I do not invest in riskier bond funds that focus primarily on emerging markets, high yield and bank loans. My preference is to "spice up" and diversify my portfolio by investing the remaining 20-30% in equity/balanced funds like TWEIX, GLFOX, FRIFX and VWINX, for example.
    Anyway, I am glad to see that two of my favorite posters are in the same ballpark when it comes to selecting OEF bond funds.

  4. #4
    After several more days the following are funds that work in this market (but it's not a guarantee)....chart
    Multi=PIMIX...PTIAX. Both have MBS which work better with rates changes
    Mostly ST HY=RSIVX...OSTIX
    Bank loans=SAMBX/SFRAX
    Nontraditional=PMZIX(using MBS)
    HY Muni=PHMIX
    The above also have a nice yield.

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