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Re: Bond OEF Investing for More Conservative Investors

2 that have been left out of the conversation.

BTMIX : 1 day .1%, 1 week .29%, YTD 1.71%

VFIJX:   1 day -.09%, 1 week .52%, YTD 1.99% (rarely discussed)

PDSZX looks interesting.


@dtconroe wrote:

I would remind posters that this thread is to discuss "low risk", not "no risk", bond oefs, for investors who are not traders, and hope to hold funds for a longer period of time of at least a year.  There was no suggestion that these funds are "cash subs", or that when you have one the worst one day market days in our histories, low risk funds will have no losses.  In 2019, all we were getting is outstanding performance by bond oefs, and risk was on, but 2020 is just the opposite now experiencing a major correction and going toward a potential recession.  Panic selling in 2020 is becoming commonplace and each investor has to decide what kind of investor they want to be.

Here is what has happened to the M* Low Risk funds, that I mentioned in the OP, noting % Total Return.

Multisector Bond OEFS

1. VCFAX: 1 day -.29, 1 week -.21, YTD +1.41

2. ANGIX: 1 day -.90, 1 week -.40, YTD +.92

3. TSIAX: 1 day -.92, 1 week -.70, YTD +.33

NonTraditional Bond OEFs

1. MWCIX: 1 day -1.00, 1 week -1.03, YTD +.03

2. SEMMX: 1 day -.48, 1 week -.58, YTD +1.21

3. PMZIX: 1day -.46, 1 week -.49, YTD +.80

HY Muni Bond OEFs

1. AAHMX: 1 day -.10, 1week -.14, 1 week +.51

2. PDSZX: 1 day +.09, 1 week +.31, 1 week +2.49

Short Term Bond OEFs

1. DHEAX: 1 day -.10, 1 week +.10, YTD +1.43

2. DBLSX: 1 day -.20, 1 week -.10, YTD  +.65

Investors who want to stay invested, will have to answer the personal question of how much they are willing to lose on one of the worst market days in our history, what kind of bond oefs that meet their risk criteria, what is an acceptable peak to trough loss they can tolerate and stay invested, etc.  




 

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Re: Bond OEF Investing for More Conservative Investors


@dtconroe wrote:

Very conservative nontraditional bond oefs (PMZIX, SEMMX, MWCIX) were down, but less than .5%, but more risky bond oefs like JMSIX, PUCZX, JMUTX were hit harder with over 1% losses.  

@dtconroe, It looks like ANGIX, which has low SD and volatility, dumped 0.9% as well. Not sure why it lost more than the other nontraditional oefs but yesterday was not a good day in the bond land.  Also, ANGIX lost a lot of NAV in 2015. Maybe, some bad investments, I guess.

ANGIX Chart.

And, PIMIX lost 1.76% and it looks like they have lots of high yield in their portfolio. Wow!

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Re: Bond OEF Investing for More Conservative Investors

Gary: 2 that have been left out of the conversation.

BTMIX : 1 day .1%, 1 week .29%, YTD 1.71%

VFIJX:   1 day -.09%, 1 week .52%, YTD 1.99% (rarely discussed)

Gary, those are clearly good funds in a couple of categories that could  be alternatives to Short Term Bond OEFs.  I did not attempt to cover all M* Bond OEF categories, and there are clearly other categories that are very low risk and great safe harbors during rocky markets.  As you consider more risky bond oef categories (Multisector, NonTraditional, HY Muni, etc), you have to determine how much risk you are willing to take to get potentially higher returns.  I think a lot of investors would be laughing at the possibility of selling a higher risk fund, that lost less than 1% in one of the worst market days in our history.  

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Re: Bond OEF Investing for More Conservative Investors

TGLMX NAV remained same as the day before - higher quality mbs.

Added by Edit: This morning CNBC has it up .76%, but Vanguard had it as unchanged. 

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Re: Bond OEF Investing for More Conservative Investors


@RainGater wrote:

@dtconroe wrote:

Very conservative nontraditional bond oefs (PMZIX, SEMMX, MWCIX) were down, but less than .5%, but more risky bond oefs like JMSIX, PUCZX, JMUTX were hit harder with over 1% losses.  

@dtconroe, It looks like ANGIX, which has low SD and volatility, dumped 0.9% as well. Not sure why it lost more than the other nontraditional oefs but yesterday was not a good day in the bond land.  Also, ANGIX lost a lot of NAV in 2015. Maybe, some bad investments, I guess.

ANGIX Chart.

And, PIMIX lost 1.76% and it looks like they have lots of high yield in their portfolio. Wow!



@RainGater wrote:

@dtconroe wrote:

Very conservative nontraditional bond oefs (PMZIX, SEMMX, MWCIX) were down, but less than .5%, but more risky bond oefs like JMSIX, PUCZX, JMUTX were hit harder with over 1% losses.  

@dtconroe, It looks like ANGIX, which has low SD and volatility, dumped 0.9% as well. Not sure why it lost more than the other nontraditional oefs but yesterday was not a good day in the bond land.  Also, ANGIX lost a lot of NAV in 2015. Maybe, some bad investments, I guess.

ANGIX Chart.

And, PIMIX lost 1.76% and it looks like they have lots of high yield in their portfolio. Wow!


Rain, we learn a lot about Bond OEFs in times like this.  ANGIX is in the Multisector Bond category, is predominantly invested in Securitized assets, but did not perform as well yesterday as a similar multisector bond oef VCFAX, but did outperform the JMSIX, PUCZX, JMUTX, PIMIX type funds that got hit much harder yesterday and YTD.  ANGIX still looks like a low risk multisector bond oef for the year.  It is all about risk/reward and whether you want to hold any multisector bond oef during terrible market periods like the one we are in.  It is easy to be philosophical and hype very risky funds in hot markets like 2019, but in tough markets like 2020 are you willing to continue holding those hot multisector bond oefs?  If you are a longer term investor, you should be trying to answer those questions and evaluate your investing choices.

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Re: Bond OEF Investing for More Conservative Investors

I question MWCIX. It has exposure to high yield and corp. bonds. I am not sure if that is a good bet at this time of the turbulent market. The 1% drop yesterday may have reflected that.

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Re: Bond OEF Investing for More Conservative Investors


@Gary1952 wrote:

I question MWCIX. It has exposure to high yield and corp. bonds. I am not sure if that is a good bet at this time of the turbulent market. The 1% drop yesterday may have reflected that.


Gary, I will confess MWCIX was one of the bigger "negative" surprises for me yesterday.  I am not sure why but it does hold one of the highest credit array of bonds in its portfolio, being almost 92% in investment grade bonds.  I can only guess that its 24% in Corporates must have been part of the problem.  The other "Low" risk nontraditional bond oefs (PMZIX and SEMMX) are almost all in securitized assets, and they had a better day, with about 1/2 the loss of MWCIX.  Yesterday will push you to look in more detail at what a bond oef holds, and how well it is meeting the role you expected it to play.  MWCIX is now flat for the year, but I expected to perform more in line with Short Term Bond Oefs, and it did not do that.

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Re: Bond OEF Investing for More Conservative Investors

I thought FD mentioned that JMSIX holds high credit bonds after talking with an advisor but not sure why it tanked 1.34% y'day. It was holding strong for the whole year and gave up everything on one day. I know JMSIX may not fit the bill for being a conservative fund as DT states to be the criteria for discussing it on this thread, but if the bonds are high quality, then does it qualify or very volatile?

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Re: Bond OEF Investing for More Conservative Investors

JMSIX has over 20% HY. I am sure that contributed to the decline. From the website, the breakdown does not look IG.

AAA 21.1%
AA 0.7%
A 4.4%
BBB 18.8%
BB 28.5%
B 14.7%
CCC & Lower/Other 11.8%

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Re: Bond OEF Investing for More Conservative Investors


@Gary1952 wrote:

JMSIX has over 20% HY. I am sure that contributed to the decline. From the website, the breakdown does not look IG.


I agree as that's what I see it in their website and Schwab as well. But, FD was saying that he talked to the adviser and he told him that they *recently* moved to high quality bonds and that was my question. The websites usually do NOT have the current bond holdings as there might be a 3 month lag.

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Re: Bond OEF Investing for More Conservative Investors


@RainGater wrote:

I thought FD mentioned that JMSIX holds high credit bonds after talking with an advisor but not sure why it tanked 1.34% y'day. It was holding strong for the whole year and gave up everything on one day. I know JMSIX may not fit the bill for being a conservative fund as DT states to be the criteria for discussing it on this thread, but if the bonds are high quality, then does it qualify or very volatile?


I am not defining what conservative means to any investor.  I started out with low SD funds that M* rated as Low Risk, but several posters have mentioned funds that met their criteria for low risk and conservative.   JMSIX is probably one of those funds, similar to JMUTX and PIMIX, that meets some investors definition of conservative while others may consider them more risky.  What I hoped this thread would do, would be a discussion thread for which Bond oefs would be worth holding for a longer period of time, even in very tough market conditions.

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Re: Bond OEF Investing for More Conservative Investors

@dtconroewrote: I am not defining what conservative means to any investor. I started out with low SD funds that M* rated as Low Risk, but several posters have mentioned funds that met their criteria for low risk and conservative. JMSIX is probably one of those funds, similar to JMUTX and PIMIX, that meets some investors definition of conservative while others may consider them more risky. What I hoped this thread would do, would be a discussion thread for which Bond oefs would be worth holding for a longer period of time, even in very tough market conditions.

 

dt,

I don't know how useful it is, especially in an extremely low interest rate environment, to keep defining "conservative" on the basis of low SD and M*'s "Low Risk" rating. Sorry, but these are backward looking risk measurements that may not be very useful as a guide for the near future in this very volatile and unpredictable market environment. As a conservative and retired investor, my first order of business is to minimize any damage to my portfolio and attend to capital preservation.

I also don't know if, at this time,  it makes sense to keep thinking of holding funds "for a longer period of time".  A certain amount of flexibility is probably the key to survive in these "very tough market conditions". Maybe a reset in our thinking is in order?

Last week, I sold some of my past favorite OEF's like JMSIX, JMUTX, PIMIX, PUCZX, etc., and am all in cash/MM now. I will wait until I get a better sense of what may be coming down the pike, especially how well we handle the corona virus epidemic. As I said, capital preservation currently meets my comfort level.

Here, for example, are several bond OEFs that did surprisingly well yesterday and last week, but haven't received much attention on these boards. I have put them on my watchlist for future reference, even though their SD's are not exactly in the range that I have been accustomed to in the past few years. Maybe the type/quality of bonds a fund holds will be a more  important criteria how well a fund performs in this rather unpredictable environment?

                      March 9       1 Week       YTD         1 YR           SD         Yield

BAGIX            -0.08%         1.55%       5.40%      13.38%       3.12        2.64%

BCOIX            -0.33            1.09          4.67         12.84          2.94        2.85

PTTRX           -0.18             1.75          5.50         12.56          3.05        3.62

Good luck, dt. I always enjoy reading your thoughtful posts.

Fred

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Re: Bond OEF Investing for More Conservative Investors

It is times like this I like BAGIX more than BCOIX. I use DODIX for an intermediate core plus holding. Having sold PIGIX, all I have left in the intermediate bond category is BAGIX, FTBFX, DODIX and some intermediate indexed bond funds. I also have  some short term funds with more credit risk. I feel it depends on what kind of risk we are currently facing?  I will probably sell more bond funds and begin to invest in some balanced funds like VWIAX.

 

I don't think interest rates are going to zero, rather they will stay low and with some volatility.

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Re: Bond OEF Investing for More Conservative Investors


@dtconroe wrote:

@Gary1952 wrote:

I question MWCIX. It has exposure to high yield and corp. bonds. I am not sure if that is a good bet at this time of the turbulent market. The 1% drop yesterday may have reflected that.


Gary, I will confess MWCIX was one of the bigger "negative" surprises for me yesterday.  I am not sure why but it does hold one of the highest credit array of bonds in its portfolio, being almost 92% in investment grade bonds.  I can only guess that its 24% in Corporates must have been part of the problem.  The other "Low" risk nontraditional bond oefs (PMZIX and SEMMX) are almost all in securitized assets, and they had a better day, with about 1/2 the loss of MWCIX.  Yesterday will push you to look in more detail at what a bond oef holds, and how well it is meeting the role you expected it to play.  MWCIX is now flat for the year, but I expected to perform more in line with Short Term Bond Oefs, and it did not do that.

Paul:  Gents ....  I am a fan of unconstrained bond funds for a portion of my portfolio.  Not just any unconstrained but one from a bond house that I am familiar with and not whole hog.  25% is my target and MWCIX is perfectly fine in that role.  It is designed to shine when rates go up as it shuns interest rate risk and takes on credit risk.  It did not shine yesterday but I would not expect it to.  A little zig zag is what you want in a diversified portfolio.  




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Re: Bond OEF Investing for More Conservative Investors


@fred495 wrote:

@dtconroewrote: I am not defining what conservative means to any investor. I started out with low SD funds that M* rated as Low Risk, but several posters have mentioned funds that met their criteria for low risk and conservative. JMSIX is probably one of those funds, similar to JMUTX and PIMIX, that meets some investors definition of conservative while others may consider them more risky. What I hoped this thread would do, would be a discussion thread for which Bond oefs would be worth holding for a longer period of time, even in very tough market conditions.

 

dt,

I don't know how useful it is, especially in an extremely low interest rate environment, to keep defining "conservative" on the basis of low SD and M*'s "Low Risk" rating. Sorry, but these are backward looking risk measurements that may not be very useful as a guide for the near future in this very volatile and unpredictable market environment. As a conservative and retired investor, my first order of business is to minimize any damage to my portfolio and attend to capital preservation.

I also don't know if, at this time,  it makes sense to keep thinking of holding funds "for a longer period of time".  A certain amount of flexibility is probably the key to survive in these "very tough market conditions". Maybe a reset in our thinking is in order?

Last week, I sold some of my past favorite OEF's like JMSIX, JMUTX, PIMIX, PUCZX, etc., and am all in cash/MM now. I will wait until I get a better sense of what may be coming down the pike, especially how well we handle the corona virus epidemic. As I said, capital preservation currently meets my comfort level.

Here, for example, are several bond OEFs that did surprisingly well yesterday and last week, but haven't received much attention on these boards. I have put them on my watchlist for future reference, even though their SD's are not exactly in the range that I have been accustomed to in the past few years. Maybe the type/quality of bonds a fund holds will be a more  important criteria how well a fund performs in this rather unpredictable environment?

                      March 9       1 Week       YTD         1 YR           SD         Yield

BAGIX            -0.08%         1.55%       5.40%      13.38%       3.12        2.64%

BCOIX            -0.33            1.09          4.67         12.84          2.94        2.85

PTTRX           -0.18             1.75          5.50         12.56          3.05        3.62

Good luck, dt. I always enjoy reading your thoughtful posts.

Fred


Hi Fred, nice to hear from you.  Sounds like a great timing decision on your recent sells. I always value your posts, so I will look forward to whatever you want to contribute to this thread.   

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Re: Bond OEF Investing for More Conservative Investors

I would be concerned about the corporates it holds in the face of a looming possible recession.  2% in 2 days was quite a zig. It was the worst performer I had.


@PaulR888 wrote:

@dtconroe wrote:

@Gary1952 wrote:

I question MWCIX. It has exposure to high yield and corp. bonds. I am not sure if that is a good bet at this time of the turbulent market. The 1% drop yesterday may have reflected that.


Gary, I will confess MWCIX was one of the bigger "negative" surprises for me yesterday.  I am not sure why but it does hold one of the highest credit array of bonds in its portfolio, being almost 92% in investment grade bonds.  I can only guess that its 24% in Corporates must have been part of the problem.  The other "Low" risk nontraditional bond oefs (PMZIX and SEMMX) are almost all in securitized assets, and they had a better day, with about 1/2 the loss of MWCIX.  Yesterday will push you to look in more detail at what a bond oef holds, and how well it is meeting the role you expected it to play.  MWCIX is now flat for the year, but I expected to perform more in line with Short Term Bond Oefs, and it did not do that.

Paul:  Gents ....  I am a fan of unconstrained bond funds for a portion of my portfolio.  Not just any unconstrained but one from a bond house that I am familiar with and not whole hog.  25% is my target and MWCIX is perfectly fine in that role.  It is designed to shine when rates go up as it shuns interest rate risk and takes on credit risk.  It did not shine yesterday but I would not expect it to.  A little zig zag is what you want in a diversified portfolio.  





 

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Re: Bond OEF Investing for More Conservative Investors

Well, @dtconroe, that just shows to go you, the three funds that I cited in my previous post, BAGIX, BCOIX and PTTRX, that did so well yesterday got clobbered today as interest rates rose. So far, the only bond OEF that has shown any kind of daily performance consistency recently seems to be DHEIX. I may consider putting some of my cash into this short term fund.

Otherwise, at this point, I can only concur with Lamar who wrote on another thread:

"I have been fearful of OEF bonds for some time. Last week I sold most OEF bond funds. Today I sold the remainder. My equity positions were sold earlier this year.

Today almost 100% of my investments are in the only asset class currently providing a profit; ie Cash.

Going forward, I think one can only profit from equities. The world as we knew it does not exist anymore.

Any future equity purchases will be small targeted investments. No asset allocation. No buy and hold. Only buy and watch ..."

Sorry, dt, hope I didn't take your thread too far off topic. But, these are unusual times. These extremely low interest rates, and the unknowns associated with the spread of the corona virus, may require a significantly different investment strategy. What has worked well in the past may no longer do the job.

Good luck,

Fred

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Re: Bond OEF Investing for More Conservative Investors

clobbered it right.  yoikes!

Firefox_Screenshot_2020-03-11T00-29-52.887Z.png

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Re: Bond OEF Investing for More Conservative Investors

Gary ... I can only comment on what Gundlach said in his May 14, 2019 webcast.  He said DFLEX doing OK because no sign of recession.  He hopes to sniff out a coming recession 4 to 6 months ahead and he will change the portfolio within 2 months if he sees recession coming.  He said DFLEX is more actively managed than DBLTX.  I assume MetWest PMs will do same.  They are all seasoned bond PMs doing this stuff for a long time over multiple business cycles.  

DFLEX hurt me too but was not even my worst performer.  Pimco Income and Diversified Income both have higher EM% and HY% and did worse.  But like I said, I have not designed a portfolio with funds that all look alike and doing best in short run.  I can live with each funds historical annual results.  That is the best I can do.

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Re: Bond OEF Investing for More Conservative Investors


@fred495 wrote:

Well, @dtconroe, that just shows to go you, the three funds that I cited in my previous post, BAGIX, BCOIX and PTTRX, that did so well yesterday got clobbered today as interest rates rose. So far, the only bond OEF that has shown any kind of daily performance consistency recently seems to be DHEIX. I may consider putting some of my cash into this short term fund.

Otherwise, at this point, I can only concur with Lamar who wrote on another thread:

"I have been fearful of OEF bonds for some time. Last week I sold most OEF bond funds. Today I sold the remainder. My equity positions were sold earlier this year.

Today almost 100% of my investments are in the only asset class currently providing a profit; ie Cash.

Going forward, I think one can only profit from equities. The world as we knew it does not exist anymore.

Any future equity purchases will be small targeted investments. No asset allocation. No buy and hold. Only buy and watch ..."

Sorry, dt, hope I didn't take your thread too far off topic. But, these are unusual times. These extremely low interest rates, and the unknowns associated with the spread of the corona virus, may require a significantly different investment strategy. What has worked well in the past may no longer do the job.

Good luck,

Fred


Fred, I really appreciate your posting.  We all need to process how to manage our investing decisions in this tough market.  So, thanks for sharing your thoughts and look forward to any thread contributions you choose to make in the future.

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