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Participant ○

Re: Bond OEF Investing for More Conservative Investors

I would like to mention VFIIX Vanguard GNMA fund.  In the post-GFC ,circa  2009, it served as a good money market replacement.

Unfortunately it was closed to new investors at that time. It is open now, minimum $3000.

It has held up relatively well.  SEC interest 2.3%.

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Re: Bond OEF Investing for More Conservative Investors

My bond OEFs are down again today. SEMMX is in a free fall at 9.89 (-0.17 or -1.69%). Not sure what's going on with these much loved OEFs that they are losing value hand over fist!  Time to sell and move on I guess as their paltry divey is incomparable to their daily NAV drops... 

I am even worried to look at my other OEFs, JMSIX, PIMIX, and VCFIX as I am sure that they would have lost even more! Carnage in full swing!

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Re: Bond OEF Investing for More Conservative Investors


@Sheryldell wrote:

I would like to mention VFIIX Vanguard GNMA fund.  In the post-GFC ,circa  2009, it served as a good money market replacement.

Unfortunately it was closed to new investors at that time. It is open now, minimum $3000.

It has held up relatively well.  SEC interest 2.3%.


I have it on a watchlist and it has started showing some weakness in the past week--down close to 1%, and is negative for one month, but still slightly positive YTD.  I am very conservative, and the government fund I like is EALDX/EILDX--just barely down for the week, but positive for the month and YTD

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Re: Bond OEF Investing for More Conservative Investors


@RainGater wrote:

My bond OEFs are down again today. SEMMX is in a free fall at 9.89 (-0.17 or -1.69%). Not sure what's going on with these much loved OEFs that they are losing value hand over fist!  Time to sell and move on I guess as their paltry divey is incomparable to their daily NAV drops... 

I am even worried to look at my other OEFs, JMSIX, PIMIX, and VCFIX as I am sure that they would have lost even more! Carnage in full swing!


I think all of these funds are showing significant weakness--I think they are out of cash/cash alternatives for redemptions and are now dropping more rapidly as they have to sell their existing bond assets before they want to.  Even funds like DHEAX, supposedly very safe, are starting to deteriorate more rapidly.  

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Re: Bond OEF Investing for More Conservative Investors

The bond fund turbulence is upsetting.  I sold out of Pimco Diversified Income today.  Too much EM and HY.  As I have Pimco Income as one of top holdings I made a mistake adding Pimco Diversified Income which doubles the EM and HY and my indigestion.  I'll be changing the allocation among my remaining 5 bond OEFs and will post in next couple of days after I sort out. I guess one positive thing about being fully invested is it battle tests your portfolio and highlights the weaknesses which I can do something about, now or a little later.  If this chaos happens again when I am much older I may be mentally not able to do anything about it then.  That is why I am liking allocation funds for my Trust in the future.  Let somebody else worry about the equity:bond mix.  

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Re: Bond OEF Investing for More Conservative Investors


@PaulR888 wrote:

The bond fund turbulence is upsetting.  I sold out of Pimco Diversified Income today.  Too much EM and HY.  As I have Pimco Income as one of top holdings I made a mistake adding Pimco Diversified Income which doubles the EM and HY and my indigestion.  I'll be the allocation among my remaining 5 bond OEFs and will post in next couple of days after I sort out. I guess one positive thing about being fully invested is it battle tests your portfolio and highlights the weaknesses which I can do something about, now or a little later.  If this chaos happens again when I am much older I may be mentally not able to do anything about it then.  That is why I am liking allocation funds for my Trust in the future.  Let somebody else worry about the equity:bond mix.  


Good luck Paul.  There is hardly anything that is working now. I am not finding any good reason to expect a turnaround anytime soon.  Kind of scary for sure.  

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Re: Bond OEF Investing for More Conservative Investors

That is what I was planning to do with funds like SCHD and VIG. I already own them and part of rebalancing has me buying more. The div for SCHD is now 3.93% based on Wednesday price. Don't necessarily need the income right now.

Sorry for the off-topic post.


@DrVenture wrote:

I know that this is way off topic. But I will offer this thought. If I were needing income right now. I would seriously consider bottom fishing top notch dividend stocks with attractive yield up to my risk tolerance level. And then putting everything else in the best MMF funds I could find. Maybe some 1 yr CDs to slighly boost return.  Would owning 30% of companies like MCD and KO @ 4% FDY really be worse than bond oef NAV erosion?

Ignore me, if I am just being crazy. Trying to think outside the box. These are not normal times.


 

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Re: Bond OEF Investing for More Conservative Investors

It seems there are investors in different camps right now--some want to take advantage of more risky opportunities to put their cash to work for future total return.  Others want to find a better place to shelter and put their cash in options other  than money markets.  I am not willing to advise risk taking options for "opportunities", but if you are interested in the second option of safe options that are a bit better than MMs, you might want to look at short term government bonds.  Here are just a few to consider:

                                           1 month TR                   YTD TR                   Distribution Yield

EALDX                                     +.95%                        +1.18%                      2.92%

ASGHX                                    +1.25%                       +1.74%                      1.75%

FFXSX                                      +1.61%                       +2.45%                      1.80%

GSSDX                                      +1.25%                       +.55%                        2.08%

VFISX                                       +.98%                          +1.55%                     2.20%           

 

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Explorer ○○

Re: Bond OEF Investing for More Conservative Investors


@dtconroe wrote:

@PaulR888 wrote:

The bond fund turbulence is upsetting.  I sold out of Pimco Diversified Income today.  Too much EM and HY.  As I have Pimco Income as one of top holdings I made a mistake adding Pimco Diversified Income which doubles the EM and HY and my indigestion.  I'll be the allocation among my remaining 5 bond OEFs and will post in next couple of days after I sort out. I guess one positive thing about being fully invested is it battle tests your portfolio and highlights the weaknesses which I can do something about, now or a little later.  If this chaos happens again when I am much older I may be mentally not able to do anything about it then.  That is why I am liking allocation funds for my Trust in the future.  Let somebody else worry about the equity:bond mix.  


Good luck Paul.  There is hardly anything that is working now. I am not finding any good reason to expect a turnaround anytime soon.  Kind of scary for sure.  


These are the magic words that would create a turnaround: We have a vaccine!

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Contributor ○○○

Re: Bond OEF Investing for More Conservative Investors


@Poorfolio wrote:

@dtconroe wrote:

@PaulR888 wrote:

The bond fund turbulence is upsetting.  I sold out of Pimco Diversified Income today.  Too much EM and HY.  As I have Pimco Income as one of top holdings I made a mistake adding Pimco Diversified Income which doubles the EM and HY and my indigestion.  I'll be the allocation among my remaining 5 bond OEFs and will post in next couple of days after I sort out. I guess one positive thing about being fully invested is it battle tests your portfolio and highlights the weaknesses which I can do something about, now or a little later.  If this chaos happens again when I am much older I may be mentally not able to do anything about it then.  That is why I am liking allocation funds for my Trust in the future.  Let somebody else worry about the equity:bond mix.  


Good luck Paul.  There is hardly anything that is working now. I am not finding any good reason to expect a turnaround anytime soon.  Kind of scary for sure.  


These are the magic words that would create a turnaround: We have a vaccine!


Everybody has their own plan on what to do next, and I am not going to push any particular plan on this thread.  Based on my personal situation, I have built up some significant cash over the past month, but I will wait, monitor, and evaluate my options for awhile longer before I do anything too daring.

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Contributor ○○

Re: Bond OEF Investing for More Conservative Investors

Here is my modified bond OEF portfolio, after liquidating Pimco Diversified Income:

DBLTX (DoubleLine Total Return):  25%

DFLEX (DoubleLine Flexible):  25%

PIPNX (Pimco Income):  25%

PTTNX (Pimco Total Return):  13%

DBLFX (DoubleLine Core FI):  12%

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Participant ○○

Re: Bond OEF Investing for More Conservative Investors

Most of the bond OEFs that are mentioned in this thread or elsewhere claiming to be conservative doesn't really apply in the current environment. SD, Sharpe, Sortino, etc, work during good times but when the times are rough, all of them are thrown out as these bond OEFs have a mind of their own.

Valuable lesson learned and only the short term govt bonds hold value in turbulent times! I kept fooling around looking at SD < 2 and all the other wonderful/colorful risk factors only to find out it doesn't really work when it really matters!

Oh well, it was fun while it lasted...

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Re: Bond OEF Investing for More Conservative Investors

All bond funds can be risky in turbulent times. The most safe will be lower yielding funds with short duration and high quality, like short term treasuries. While ultra-short VUSFX is very conservative,short term treasury, VFIRX is more conservative and has held up better.  Except yield (.93%) on short term treasury is less than online savings account,or most settlement money market accounts like VMMXX paying 1.37%., or tax exempt VMSXX 1.26; VFIRX is only a better choice if it increases in value and being fed tax exempt.

 

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Re: Bond OEF Investing for More Conservative Investors

IOFIX is down 10.66% today. This is absolutely incredible (and scary) for such a safe (in the past) fund. I know that some wise people sold it early. It took me longer to make a decision, I was lucky to sell it during the last two days, but it was very close...

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Valued Contributor

Re: Bond OEF Investing for More Conservative Investors

When a fund like TRBUX is down 1% today and 2% YTD, there is little refuge. Looking at MMF for cash right now, no "cash subs" until I see where this is heading. Sold my final tiny exposure to PRFSX & TRBUX yesterday.

Will be looking at VFIRX and FFSXS for excess cash though, thanks guys.

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Explorer ○

Re: Bond OEF Investing for More Conservative Investors


@FatKat wrote:

All bond funds can be risky in turbulent times. The most safe will be lower yielding funds with short duration and high quality, like short term treasuries. While ultra-short VUSFX is very conservative,short term treasury, VFIRX is more conservative and has held up better.  Except yield (.93%) on short term treasury is less than online savings account,or most settlement money market accounts like VMMXX paying 1.37%., or tax exempt VMSXX 1.26; VFIRX is only a better choice if it increases in value and being fed tax exempt.

 


FatCat,

I am seeing a bit of erosion in the Daily Market Value over the past three days with VMSXX. Vanguard has not updated yesterday. I have done some research and can't find where this has happened before. A trend? Vanguard goes out to four decimal points, but if this continues, it certainly will be a problem.

https://investor.vanguard.com/mutual-funds/profile/portfolio/vmsxx

Thoughts from anyone?

Hootz

 

 

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Valued Contributor

Re: Bond OEF Investing for More Conservative Investors


@Hootz wrote:

@FatKat wrote:

All bond funds can be risky in turbulent times. The most safe will be lower yielding funds with short duration and high quality, like short term treasuries. While ultra-short VUSFX is very conservative,short term treasury, VFIRX is more conservative and has held up better.  Except yield (.93%) on short term treasury is less than online savings account,or most settlement money market accounts like VMMXX paying 1.37%., or tax exempt VMSXX 1.26; VFIRX is only a better choice if it increases in value and being fed tax exempt.

 


FatCat,

I am seeing a bit of erosion in the Daily Market Value over the past three days with VMSXX. Vanguard has not updated yesterday. I have done some research and can't find where this has happened before. A trend? Vanguard goes out to four decimal points, but if this continues, it certainly will be a problem.

https://investor.vanguard.com/mutual-funds/profile/portfolio/vmsxx

Thoughts from anyone?

Hootz


That tiny bit of erosion in internal value of muni m-mkt VMSXX shouldn't be of concern.

But note that there are recent outflows from both muni VMSXX and retail prime VMMXX, but inflows into gov VMFXX.

Also, as has been in the news, the Fed has provided huge support for m-mkt repos [used by m-mkt funds and many other institutions/entities], commercial paper [used by prime m-mkt funds] and short term muni securities [used by muni m-mkt funds].

Check SPAXX vs FZDXX thread for more before someone starts to complain about talking about m-mkt funds here.

YBB
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Valued Contributor

Re: Bond OEF Investing for More Conservative Investors


@yogibearbull wrote:


That tiny bit of erosion for muni m-mkt VMSXX shouldn't be of concern.

But note that there are recent outflows from both muni VMSXX and retail prime VMMXX, but inflows into gov VMFXX.

Also, as has been in the news, the Fed has provided huge support for m-mkt repos [used by m-mkt funds and many other institutions/entities], commercial paper [used by prime m-mkt funds] and short term muni securities [used by muni m-mkt funds].


+1 

I heard all the above but switched to Gov MM. At this point, I look at safety and be able to sell my MM and enter a trade.

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Re: Bond OEF Investing for More Conservative Investors

It has become clear that the common thread among the “conservative” funds talked about here are MBS. So many of these assets are being put on the open market to fund redemptions. The bottom has dropped out and caused NAVs to tank. It appears that housing, in another form has, has played a role similar to 2008. The IOFIX thread was an eye-opener on this subject. The next question will be where all of these “distressed” MBS assets are going?


@RainGater wrote:

Most of the bond OEFs that are mentioned in this thread or elsewhere claiming to be conservative doesn't really apply in the current environment. SD, Sharpe, Sortino, etc, work during good times but when the times are rough, all of them are thrown out as these bond OEFs have a mind of their own.

Valuable lesson learned and only the short term govt bonds hold value in turbulent times! I kept fooling around looking at SD < 2 and all the other wonderful/colorful risk factors only to find out it doesn't really work when it really matters!

Oh well, it was fun while it lasted...


 

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Explorer ○

Re: Bond OEF Investing for More Conservative Investors


@FD1001 wrote:

@yogibearbull wrote:


That tiny bit of erosion for muni m-mkt VMSXX shouldn't be of concern.

But note that there are recent outflows from both muni VMSXX and retail prime VMMXX, but inflows into gov VMFXX.

Also, as has been in the news, the Fed has provided huge support for m-mkt repos [used by m-mkt funds and many other institutions/entities], commercial paper [used by prime m-mkt funds] and short term muni securities [used by muni m-mkt funds].


+1 

I heard all the above but switched to Gov MM. At this point, I look at safety and be able to sell my MM and enter a trade.


FD,

How can a wealth chap like you pass on Schwab Municipal Money Fund SWTXX with a 7-Day Yield of 2.80%?

https://www.schwabfunds.com/public/csim/home/products/mutual_funds/summary.html?symbol=SWTXX

As I am sure you are aware, the Fed is supporting municipal money market funds.

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200320b.htm

At 2.80% federally tax-free and supported by the Fed, it seems like a good alternative for "more conservative investors".

Hootz

 

 

 

 

 

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