cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Frequent Contributor

Bond OEFs With Lower Risk

For posters/investors looking for a Bond OEF with lower risk metrics, I have decided to provide a list of several Bond OEFs that M* rates as Below Average or Low Risk, and which have a Standard Deviation below 5, and which have a positive YTD performance, or YTD performance with less than 1% loss.  I realize there are many funds in very low risk categories like short term bonds, but I wanted to focus on the higher risk categories of Multisector, NonTraditional, Intermediate Core, and Intermediate Core Plus.  Because I only use Schwab Brokerage, this list may not include some additional funds available from other brokerages besides Schwab.  Additionally, I would acknowledge that if you are looking for higher Total Return, there may be arguments for some additional funds that are excluded from this list because they exceed one of the Risk criteria I have used in this thread--a noticeable example is ANBEX that M* gives an Average Risk Rating.  Some other funds that some may want to argue for but their SD exceeds 5, or their YTD is larger than a 1% loss.  Additionally there are funds which have not existed long enough to get rated by M* for risk or SD.  Here is the list according to M*:

                                                                      YTD TR                                SD                                 M* Risk

Multisector                           PTIAX                 -.29                                   4.52                               Low

                                             TSIIX/TSIAX     +1.27                                  4.71                               Below Av

               

 Intermediate Core              BMPAX               +.98                                  3.46                               Below Av 

                                            BIMIX/BIMSX   +4.33                                 2.76                                Below Av

                                            VKMGX             +2.67                                 2.41                                Low

Intermediate Core Plus      GIBLX                 +7.03                                 2.87                                Low

                                           DODIX                 +4.77                                3.41                                Below Av

                                           SGVAX                 -.73                                  3.67                                Below Av

                                           DBLTX/DLTNX     +1.27                               3.46                                Below Av

                                           PTRIX/PMRAX    +2.77                               2.12                                Low

                                           SAMFX                +7.85                              3.50                                Below Av

                                           TGLMX                 +5.46                             3.54                                 Below Av

NonTraditional                   PFIUX/PUBAX        +.39                             3.81                                 Below Av

                                           MWCIX/MWCRX   -.36                             4.57                                 Below Av

                                           MNCPX/EXCPX      +.53                            3.24                                 Low

                                           PUTIX/ATMAX        +.27                            2.88                                Low

                                           PMZIX/PMZAX       +.52                            3.36                                Low

                                           JSIAX                      +.12                           3.63                                 Below Av

Note:  I am NOT recommending any of these funds.  My objective is to just give you a list of funds, you may not have considered, that meet M* lower risk criteria, with either positive YTD performance or low YTD loss                                                     

 

30 Replies
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk

What about Metropolitan West Total Return Bd M, (MWTRX) ? its a decent fancy bond fund, which is low risk on M* and has been reliable; SD is 3.4 not bad. However, going up against VBILX for five years, or more, it comes up short. 

Virtus Seix Total Return Bond I, (SAMFX) is also an impressive bond fund if you want to open a new holding with $100,000. It does not beat VBILX, long run either?

I hear you, not giving advice; I find looking at these bond funds interesting, but, for me, it is like a day laborer gazing to the display windows at Tiffany.

PS. I think some funds like core plus BCOIX did not make the list because of some M* category bias

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


See replies in red
@FatKat wrote:

What about Metropolitan West Total Return Bd M, (MWTRX) ? its a decent fancy bond fund, which is low risk on M* and has been reliable; SD is 3.4 not bad. However, going up against VBILX for five years, or more, it comes up short. 

MWTRX would fit the criteria to be included--I just overlooked it.  There are probably many funds I overlooked. Regarding VBILX, it has a M* Risk Rating of Above Average, so it does not qualify as a Lower Risk Bond OEF for this thread.  This thread is not about long run total return, it is about lower risk, so everyone is quite welcome to purchase more risky bond oefs if lower risk is not important.

Virtus Seix Total Return Bond I, (SAMFX) is also an impressive bond fund if you want to open a new holding with $100,000. It does not beat VBILX, long run either?

SAMFX is an institutional fund at Schwab that has a very low entry fee $100), and no transaction fee--as I said in my post I am with Schwab, and if you use other brokerages, the cost and availability of funds listed may be different. 

I hear you, not giving advice; I find looking at these bond funds interesting, but, for me, it is like a day laborer gazing to the display windows at Tiffany.

I listed 2 share classes for most of the funds--one is an institutional share class that usually costs $100K at Schwab, and a retail share class available for very little money (most for $100 and some for a little more like DODIX for $2500.  SAMFX is available at Schwab for the same price as most retail funds at Schwab ($100).  So, I do not understand the "Tiffany" reference, but if this list of funds is a waste of time for you, I apologize, but I can't be clear what each and every brokerage offers.  I made that very clear in my opening statement.  I thought maybe readers may find a fund or 2 that would catch their eye as interesting--for example, I find GIBLX a very low price fund, very low risk, but with great Total Return figures YTD.

PS. I think some funds like core plus BCOIX did not make the list because of some M* category bias

BCOIX has an M* risk rating of Average so it did not qualify.  I don't understand "M* category bias"--I used 3 categories of risk, and almost all brokerages uses 2 of the 3, but the M* Risk Rating is Proprietary, but largely  reflects Standard Deviation on its graphs on its Risk page.


 

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@dtconroe wrote:

See replies in red
@FatKat wrote:

What about Metropolitan West Total Return Bd M, (MWTRX) ? its a decent fancy bond fund, which is low risk on M* and has been reliable; SD is 3.4 not bad. However, going up against VBILX for five years, or more, it comes up short. 

MWTRX would fit the criteria to be included--I just overlooked it.  There are probably many funds I overlooked. Regarding VBILX, it has a M* Risk Rating of Above Average, so it does not qualify as a Lower Risk Bond OEF for this thread.  This thread is not about long run total return, it is about lower risk, so everyone is quite welcome to purchase more risky bond oefs if lower risk is not important.

Virtus Seix Total Return Bond I, (SAMFX) is also an impressive bond fund if you want to open a new holding with $100,000. It does not beat VBILX, long run either?

SAMFX is an institutional fund at Schwab that has a very low entry fee $100), and no transaction fee--as I said in my post I am with Schwab, and if you use other brokerages, the cost and availability of funds listed may be different.

That would be a consideration, but alas, it is only for Schwab clients.  Investor shares, too expensive!

I hear you, not giving advice; I find looking at these bond funds interesting, but, for me, it is like a day laborer gazing to the display windows at Tiffany.

  So, I do not understand the "Tiffany" reference, but if this list of funds is a waste of time for you, I apologize, but I can't be clear what each and every brokerage offers.  I made that very clear in my opening statement.  I thought maybe readers may find a fund or 2 that would catch their eye as interesting--for example, I find GIBLX a very low price fund, very low risk, but with great Total Return figures YTD.

Tiffany, my way of saying high cost funds. Please take what I say with a grain of salt; I speak for the minority opinion. Guggenheim offering reasonable prices? I would want more upside capture than 84 for 81 bases points!

PS. I think some funds like core plus BCOIX did not make the list because of some M* category bias

BCOIX has an M* risk rating of Average so it did not qualify.  I don't understand "M* category bias"--I used 3 categories of risk, and almost all brokerages uses 2 of the 3, but the M* Risk Rating is Proprietary, but largely  reflects Standard Deviation on its graphs on its Risk page.


I think M* risk ratings is either a bit complex, or leaves some thought to be desired. To me VBILX would not be an above average risk, yet like BAGIX, they have above average risk, while BCOIX a more risky bond fund is average. They use a strict 'kind' comparison method. I think actual risk of my bond funds are low, being I am a conservative bond fund investor.

Thank you for allowing the minority to speak out!


 

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk

Relative to your point, FatKat, I think the way M* assigns its risk ratings is confusing to most people.  All their ratings are relative to the group to which they are categorized.  So not only is there some interpretation involved in where a fund is assigned; there is also a problem in comparing risk ratings BETWEEN categories.  A "low risk" IG bond fund isn't at the same risk level as a "low risk" multisector bond fund; much less a "low risk" emerging markets equity fund. 

Then there is also the problem of deciding what one means by "risk", though by that I assume most people mean the potential to lose money at some level over some period of time.  SD, by itself, is insufficient; as some found during the crash.  It'd certainly be nice/convenient to have some kind of overall scale for 'risk' comparison applied to all investments, but if that were easy, we'd probably already HAVE it!  8^b

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk

@racqueteer , good point that M* Risk is within its categories. SD is broader and has its flaws [at M*, updated monthly; uses monthly return data; timeframe dependent] , but it adjusted for March bond crash from April onward. Multiple indicators of risk [e.g. also worse drawdown, etc] are also good.

I think that proprietary M* Risk takes into account an average of down months and compares it to the category, so it is more like relative downside SD.

YBB
0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@racqueteer wrote:

Relative to your point, FatKat, I think the way M* assigns its risk ratings is confusing to most people.  All their ratings are relative to the group to which they are categorized.  So not only is there some interpretation involved in where a fund is assigned; there is also a problem in comparing risk ratings BETWEEN categories.  A "low risk" IG bond fund isn't at the same risk level as a "low risk" multisector bond fund; much less a "low risk" emerging markets equity fund. 

Then there is also the problem of deciding what one means by "risk", though by that I assume most people mean the potential to lose money at some level over some period of time.  SD, by itself, is insufficient; as some found during the crash.  It'd certainly be nice/convenient to have some kind of overall scale for 'risk' comparison applied to all investments, but if that were easy, we'd probably already HAVE it!  8^b


That is why this thread provided 3 different measures to help identify risk by "category".  Standard Deviation which is the most common general measure of risk, M* Risk Rating, a proprietary measure of risk, on the M* Risk page, that discusses a large number of long used risk metrics, and actual YTD loss to help identify funds by "category" by a simple measure of how much money has a fund made or lost in a given category.

We can debate all day long about how to measure risk, and I tried to make it as simple as possible, but posters like "you" and FatKat throw rocks at the risk metrics I used, but you offer nothing in their place, that you want to propose is better.  

Philosophical criticism is not that difficult to offer, but an alternative method to help identify funds with lower risk, rarely gets offered.  

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk

It's challenging to say what constitutes "lower risk" in bond funds ...

- If the idea is to hedge equity exposure, Treasuries are great, particularly the long bond;

- If reliable income generation is the goal, PIMIX and friends should work;

- If it's essential to avoid credit risk, then higher quality fare is the way to go, maybe PIGIX or PTIAX;

- For low price volatility, who knows? We learned recently that historical low vol is not very predictive of future low vol (think IOFIX and SEMMX).

N.

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@dtconroe wrote:

@racqueteer wrote:

Relative to your point, FatKat, I think the way M* assigns its risk ratings is confusing to most people.  All their ratings are relative to the group to which they are categorized.  So not only is there some interpretation involved in where a fund is assigned; there is also a problem in comparing risk ratings BETWEEN categories.  A "low risk" IG bond fund isn't at the same risk level as a "low risk" multisector bond fund; much less a "low risk" emerging markets equity fund. 

Then there is also the problem of deciding what one means by "risk", though by that I assume most people mean the potential to lose money at some level over some period of time.  SD, by itself, is insufficient; as some found during the crash.  It'd certainly be nice/convenient to have some kind of overall scale for 'risk' comparison applied to all investments, but if that were easy, we'd probably already HAVE it!  8^b


That is why this thread provided 3 different measures to help identify risk by "category".  Standard Deviation which is the most common general measure of risk, M* Risk Rating, a proprietary measure of risk, on the M* Risk page, that discusses a large number of long used risk metrics, and actual YTD loss to help identify funds by "category" by a simple measure of how much money has a fund made or lost in a given category.

We can debate all day long about how to measure risk, and I tried to make it as simple as possible, but posters like "you" and FatKat throw rocks at the risk metrics I used, but you offer nothing in their place, that you want to propose is better.  

Philosophical criticism is not that difficult to offer, but an alternative method to help identify funds with lower risk, rarely gets offered.  


Yeah, @racqueteer is definitely a trouble-maker on these forums.

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@chang wrote:

@dtconroe wrote:

@racqueteer wrote:

Relative to your point, FatKat, I think the way M* assigns its risk ratings is confusing to most people.  All their ratings are relative to the group to which they are categorized.  So not only is there some interpretation involved in where a fund is assigned; there is also a problem in comparing risk ratings BETWEEN categories.  A "low risk" IG bond fund isn't at the same risk level as a "low risk" multisector bond fund; much less a "low risk" emerging markets equity fund. 

Then there is also the problem of deciding what one means by "risk", though by that I assume most people mean the potential to lose money at some level over some period of time.  SD, by itself, is insufficient; as some found during the crash.  It'd certainly be nice/convenient to have some kind of overall scale for 'risk' comparison applied to all investments, but if that were easy, we'd probably already HAVE it!  8^b


That is why this thread provided 3 different measures to help identify risk by "category".  Standard Deviation which is the most common general measure of risk, M* Risk Rating, a proprietary measure of risk, on the M* Risk page, that discusses a large number of long used risk metrics, and actual YTD loss to help identify funds by "category" by a simple measure of how much money has a fund made or lost in a given category.

We can debate all day long about how to measure risk, and I tried to make it as simple as possible, but posters like "you" and FatKat throw rocks at the risk metrics I used, but you offer nothing in their place, that you want to propose is better.  

Philosophical criticism is not that difficult to offer, but an alternative method to help identify funds with lower risk, rarely gets offered.  


Yeah, @racqueteer is definitely a trouble-maker on these forums.


Do you have something constructive to offer on how to measure risk on bond oefs by category?  Flippant sarcasm has little value in helping bond oef posters evaluate risk of bond oefs they are considering.

0 Kudos
Highlighted
Participant ○○○

Re: Bond OEFs With Lower Risk

Risk of future loss cannot be quantified. Too many variables are involved. 

Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@dtconroe wrote:

Do you have something constructive to offer on how to measure risk on bond oefs by category?  Flippant sarcasm has little value in helping bond oef posters evaluate risk of bond oefs they are considering.


There's no way to evaluate "risk" until we know what type we're talking about. Please see my previous post. Not to brag or anything, but I think it's a brilliant post.

I also think @chang was merely reacting to your comments about @racqueteer, who is probably the nicest guy at M* Discuss.

N.

Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@norbertc wrote:

@dtconroe wrote:

Do you have something constructive to offer on how to measure risk on bond oefs by category?  Flippant sarcasm has little value in helping bond oef posters evaluate risk of bond oefs they are considering.


There's no way to evaluate "risk" until we know what type we're talking about. Please see my previous post. Not to brag or anything, but I think it's a brilliant post.

I also think @chang was merely reacting to your comments about @racqueteer, who is probably the nicest guy at M* Discuss.

N.


N, I actually thought your post was educational and constructive.  Threads like this one are nothing more than an effort to help identify funds that do have some support for being considered lower risk bond oefs.  It is intended to help a poster to engage in more detailed risk assessment that fit their style of investing.  With regard to racqueteer, he is one of the "nicest guy at M* Discuss", but I have always been taught that the easiest thing to do is to offer generalized criticism, but the hardest think to do is to offer an alternative option, that is superior to what you are criticizing.  I am still waiting for posters to describe in some degree of detail, for the categories discussed on this page, an alternative risk measurement system, and then offer a large number of funds (as I did with my risk metrics), that you would recommend to posters to use in beginning their practice of distinguishing risk.

 

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk

"That is why this thread provided 3 different measures to help identify risk by "category".  Standard Deviation which is the most common general measure of risk, M* Risk Rating, a proprietary measure of risk, on the M* Risk page, that discusses a large number of long used risk metrics, and actual YTD loss to help identify funds by "category" by a simple measure of how much money has a fund made or lost in a given category."

Among the risk factors used in the OP, the weakest is YTD TR - the start time is arbitrary and the period length is variable. M* Risk page now has max drawdown and the drawdown period is indicated - for most funds that will be in March 2020 for a long time. Before, one would have to look at Charts or Portfolio Visualizer, but now M* has this data. Flaw of it, as with other M* data, is the monthly sampling, so for most funds, the drawdown period indicated may be 3/1/20- to 3/31/20 while we know that actual March drawdowns were much worse [probably for 3/5/20 to 3/23/20].

YBB
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk

May I ask what it was that I “criticized”?  I can’t recall EVER criticizing you or even commenting on a post of yours.  I certainly never “threw rocks” at something you wrote.  Oversensitive much?  My post had absolutely NOTHING to do with anything you wrote. 

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@yogibearbull wrote:

Among the risk factors used in the OP, the weakest is YTD TR - the start time is arbitrary and the period length is variable. M* Risk page now has max drawdown and the drawdown period is indicated - for most funds that will be in March 2020 for a long time. Before, one would have to look at Charts or Portfolio Visualizer, but now M* has this data. Flaw of it, as with other M* data, is the monthly sampling, so for most funds, the drawdown period indicated may be 3/1/20- to 3/31/20 while we know that actual March drawdowns were much worse [probably for 3/5/20 to 3/23/20].


Yes, YTD performance is arbitrary.  It was used to help indicate how funds have handled the 2020 March crash, compared to other funds, so if you are looking to re-enter the bond oef investing market, you could look at some M* information that helps identify risk.  So, for the Intermediate Core Plus category, I listed 3 rather simple criteria, to help investors proceed with their more detailed risk analysis that fits their investing style.  GIBLX presented some compelling data on these 3 measures for consideration of selection--a 2020 YTD performance of 7.03, a Standard Deviation of 2.87, and an M* Risk Rating of Low.   

So, please explain why GIBLX is not deserving of the categorization of a Low Risk bond oef in the Intermediate Core Plus category, that is worthy of additional investor investigation.

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@racqueteer wrote:

May I ask what it was that I “criticized”?  I can’t recall EVER criticizing you or even commenting on a post of yours.  I certainly never “threw rocks” at something you wrote.  Oversensitive much?  My post had absolutely NOTHING to do with anything you wrote. 


I am simply waiting for you to describe an better method of identifying risk of bond oefs by category, and then provide some examples of some bond oefs I could compare to the funds I listed.

0 Kudos
Highlighted
Participant ○○○

Re: Bond OEFs With Lower Risk


@dtconroe wrote:
I am simply waiting for you to describe an better method of identifying risk of bond oefs by category, and then provide some examples of some bond oefs I could compare to the funds I listed.

Keep posting your bond fund analyses, but add which ones you own and WHY. What and why is more meaningful than  names and metrics alone. If readers have other funds to suggest, they will likely pipe in.

In regard to identifying risk, I think as all are risky under pertinent conditions, even govt funds when interest rates are moving higher or when their distributions are as bad as those of money market funds.
0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk


@dtconroe wrote:

@racqueteer wrote:

May I ask what it was that I “criticized”?  I can’t recall EVER criticizing you or even commenting on a post of yours.  I certainly never “threw rocks” at something you wrote.  Oversensitive much?  My post had absolutely NOTHING to do with anything you wrote. 


I am simply waiting for you to describe an better method of identifying risk of bond oefs by category, and then provide some examples of some bond oefs I could compare to the funds I listed.


Then all you need do is ask me that, and I would try to respond.  As I noted, I don't think we HAVE a good way to compare across categories.  As far as within a category, I look at rolling returns and the relative smoothness of the curve on the chart (related to SD).  I like to see a smooth chart displaying a widening gap between a fund and its peers over time.  The greater the time span, the better.  What parameter indicates those things?  Nothing ready-made that I know of... A relative TR figure to some standard (including a time standard) would be a start.  THEN you could look at SD. 

As far as identifying funds, I think you and FD do an excellent job at both of those things.  I don't consider myself qualified to offer either of you 'advice' on that score.  I often look at funds you two have identified and subject them to my own TR, RR and SD evaluation.  Of the two of you, my situation tends toward the same ideals as your own: I tend to take my risks on equities.

0 Kudos
Highlighted
Frequent Contributor

Re: Bond OEFs With Lower Risk




@racqueteer wrote:

@dtconroe wrote:

@racqueteer wrote:

May I ask what it was that I “criticized”?  I can’t recall EVER criticizing you or even commenting on a post of yours.  I certainly never “threw rocks” at something you wrote.  Oversensitive much?  My post had absolutely NOTHING to do with anything you wrote. 


I am simply waiting for you to describe an better method of identifying risk of bond oefs by category, and then provide some examples of some bond oefs I could compare to the funds I listed.


Then all you need do is ask me that, and I would try to respond.  As I noted, I don't think we HAVE a good way to compare across categories.  As far as within a category, I look at rolling returns and the relative smoothness of the curve on the chart (related to SD).  I like to see a smooth chart displaying a widening gap between a fund and its peers over time.  The greater the time span, the better.  What parameter indicates those things?  Nothing ready-made that I know of... A relative TR figure to some standard (including a time standard) would be a start.  THEN you could look at SD. 

As far as identifying funds, I think you and FD do an excellent job at both of those things.  I don't consider myself qualified to offer either of you 'advice' on that score.  I often look at funds you two have identified and subject them to my own TR, RR and SD evaluation.  Of the two of you, my situation tends toward the same ideals as your own: I tend to take my risks on equities.



DT is absolutely correct. Instead of making posts that are not related to the OP at hand, I see distractions. 

How about put on your big boy pants, do research, and come up with other funds and engage in a healthy discussion. 

Why are we discussing risk when you know very well it's a difficult subject while you understand exactly what the OP is about?

BTW, I have been discussing risk on M* for at least 10 years and I was told I don't understand it...really?

 

0 Kudos
Announcements