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Frequent Contributor

Dear PIMIX(the last straw = higher ER)

Dear PIMIX,

You were my first bond crush, you never forget your first.  I loved and cherished you for many years but our relationship has to end.

You used to be slim (small AUM) and athletic (performance) but not anymore.  I was faithful most years but you started seeing a lot of other people.  The last straw was your expense ratio, your ER is not acceptable anymore.  PIMIX ER=1.05%, PIPNX=1.20 and PONAX=1.45%.

PIMIX performance ranks at 89-98 for 1 month thru YTD.

I found other girlfriends and they are younger, slimmer and more athletic.

FD

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Frequent Contributor

Re: Dear PIMIX(the last straw = higher ER)

> 1% for any bond fund is madness imo. And for an instl share class? That’s chutzpah.

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Participant ○○○

Re: Dear PIMIX(the last straw = higher ER)

This came up just a couple of weeks ago.  Much of the apparent fee is interest expenses on leverage. The rules changed a while ago so that leverage costs are now included in total fees. Nothing to make a big deal about...

sthanga posted:

The website says

Effective as of 07/31/2019
Total Expense Ratio1.05%
The Net Expense Ratio excluding interest expense is 0.50%. Interest expense can result from portfolio investment transactions and is not paid to PIMCO.
 
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Frequent Contributor

Re: Dear PIMIX(the last straw = higher ER)

I am sure that PONAX/PIMIX will survive after those looking for 3-6 mo performance depart. It is a matter of expectations and investing domain. 

I like trading PCI/PDI/PKO and PONAX/PIMIX. Earlier this year I sold the former and moved into the latter. So, I am not looking at just the performance of PONAX/PIMIX that will fluctuate. Some daily volatility is due to the craziness in the global bond markets and EM factors.

The above are fine multisector funds but the entry and exit points matter. Their ERs are a bit high even account for portfolio leverage, but that is just Pimco.

@keppelbay , inclusion of leverage into the ERs goes back decades - don't know if you meant that by "a while ago". A story I read was that newer mutual funds [OEFs] lobbied for this to put older CEFs on a competitive disadvantage and convinced the SEC to adopt such a regulation.

 

YBB
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Explorer ○

Re: Dear PIMIX(the last straw = higher ER)

FD1001,

I've heard from Pimco that the higher leverage expense is per expenses on 12/31/2018.  Pimco indicated that the expense they charge to fund owners may be reduced due to the decline in leverage expenses since 12/31/2018.  No, they did not say by when, by how much or if the potential reduction is guaranteed.

John

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Frequent Contributor

Re: Dear PIMIX(the last straw = higher ER)

Are you two saying that nothing has changed regarding fees, except the way they are defining or reporting them? Or that they are now passing on additional costs?

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Re: Dear PIMIX(the last straw = higher ER)


@DrVenture wrote:

Are you two saying that nothing has changed regarding fees, except the way they are defining or reporting them? Or that they are now passing on additional costs?


Actually, Pimco did increase administration and management fees on several of its funds even as their AUMs went up. That was a poor decision by the new CEO when the industry trend has been for lowering ERs. Pimco is the golden goose for Allianz that isn't doing well otherwise.

There was another confusion when M* changed its reporting policy from admin/management ER [M* could do whatever until it got into fund and advisory business itself] to total ERs [as required by the SEC]. Many posters were alarmed by large increases in the ERs but that was only due to M* reporting change, not due to anything at Pimco.

YBB
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Participant ○○○

Re: Dear PIMIX(the last straw = higher ER)


@yogibearbull wrote:

@DrVenture wrote:

Are you two saying that nothing has changed regarding fees, except the way they are defining or reporting them? Or that they are now passing on additional costs?


Actually, Pimco did increase administration and management fees on several of its funds even as their AUMs went up. That was a poor decision by the new CEO when the industry trend has been for lowering ERs.

There was another confusion when M* changed its reporting policy from admin/management ER [M* could do whatever until it got into fund and advisory business itself] to total ERs [as required by the SEC]. Many posters were alarmed by large increases in the ERs but that was only due to M* reporting change, not due to anything at Pimco.


Thanks Yogi- the reporting change I was referring to was the one by m*. That was what I recall being discussed 'a while ago'. On the actual fee increase - you may remember this more clearly than I do, but I think the fee increase was from 0.45 to 0.5 after PIMCO was bought by Allianz. Not sure about how accurate my memory is of this.

 

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Re: Dear PIMIX(the last straw = higher ER)


@keppelbay wrote:


.....

Thanks Yogi- the reporting change I was referring to was the one by m*. That was what I recall being discussed 'a while ago'. On the actual fee increase - you may remember this more clearly than I do, but I think the fee increase was from 0.45 to 0.5 after PIMCO was bought by Allianz. Not sure about how accurate my memory is of this.


Allianz bought Pimco in 2000.

Allianz appointed new CEO Roman for Pimco in 2016. Increased admin/mgmt ERs came soon after that.

https://en.wikipedia.org/wiki/PIMCO

YBB
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Re: Dear PIMIX(the last straw = higher ER)


@FD1001 wrote:

Dear PIMIX,

You were my first bond crush, you never forget your first.  I loved and cherished you for many years but our relationship has to end.

You used to be slim (small AUM) and athletic (performance) but not anymore.  I was faithful most years but you started seeing a lot of other people.  The last straw was your expense ratio, your ER is not acceptable anymore.  PIMIX ER=1.05%, PIPNX=1.20 and PONAX=1.45%.

PIMIX performance ranks at 89-98 for 1 month thru YTD.

I found other girlfriends and they are younger, slimmer and more athletic.

FD


You have had this love/hate relationship with PIMIX for the last few years.  When it is performing well, you love it, and don't care about its ER.  When it hits rough spots during the year, you sell it.  I acknowledge that it is no longer the small and nimble fund, on which it built its relationship after the 2008 debacle.  As a huge AUM fund, it has a different set of challenges, can no longer invest as a mortgage sector fund, and probably will have challenges with a very volatile set of market conditions.  But you are an investor, who trades more often in your investing strategy, so I fully expect you will be back into the fund, as soon as the market conditions become more supportive of the PIMIX investing strategy.  I find nothing surprising with this PIMCO approach with PIMIX--they never close a fund and allow very popular funds to balloon as much as investors will allow.  Investors will have to assess their investing strategy and decide if it still fits the role, for which they originally selected it in their unique portfolios.  Since you are more of a trader than many of us, that should not be a problem for you.

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Explorer ○○○

Re: Dear PIMIX(the last straw = higher ER)

The high ER not withstanding, I’d like to echo the concern over the extremely poor performance recently, in particular the month of August. 

Any other thoughts on why PIMCO income is performing so poorly relative to its category and peers? 

It seems to defy logic.

Is this a portent to move in a different direction? If so any suggestions? 

Thank you for any further thoughts or ideas. Matt.

 

***Also posted on MFO

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Re: Dear PIMIX(the last straw = higher ER)

Recent performance is disappointing. If it was DoubleLine I would sell but I think PIMCO is more short-term oriented and more likely to correct direction so I'm going to watch for a while and see if things turn around.

I'm not concerned about PIMIX expense ratio. It's 0.5% of net assets, excluding interest expense, and hasn't changed recently as far as I know. Not the SEC mandated way of reporting expense ratios but I think more meaningful for leveraged funds, non-interest expenses come to about 0.36% of AUM, which seems very competitive.

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Re: Dear PIMIX(the last straw = higher ER)

I sold all of my PIMIX a couple years ago and have never looked back.  For several reasons I’m not a fan of Pimco, but I can’t argue with their success.  

FD - which bond funds are you using now?  

 

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Explorer ○○

Re: Dear PIMIX(the last straw = higher ER)

It shouldn't come as a surprise that the NAV of PCI is also down big. -2.72% since 7/29. The price has risen during that time, meaning a swelling premium. Anyone thinking of selling their positions?

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Explorer ○

Re: Dear PIMIX(the last straw = higher ER)

Desmo,

Does your calculation include or exclude the August div (removed from NAV but not paid yet)?  I'm guessing that the NAV decline is less than calculated if the div is added back onto today's NAV.

John

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Explorer ○○

Re: Dear PIMIX(the last straw = higher ER)

I used M*s numbers on a chart that does look like it includes the 8/9 dividend decrease. So my number is likely too negative. Here's the chart the number came from.

PCI2.JPG

But the NAV has declined over the past month and the drop has been correlated with PIMIX.

PCI3.JPG

This M* chart should factor out the dividend effect.

PCI.JPG

 

 

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Frequent Contributor

Re: Dear PIMIX(the last straw = higher ER)

Interest expenses on leverage have been counted already for months now.  The ER is higher than several weeks ago. If I'm not mistaken it was under 0.8% including interest expenses and now ER is higher by at least 0.2-0.3%.

==============================

DT:You have had this love/hate relationship with PIMIX for the last few years.  Absolutely, it was my biggest % holding fund ever for several years at 40-50% and more.  In the last several years and especially in 2018-2019 I found much better options for performance + risk attributes.  It used to be very difficult to beat PIMIX.  It had a performance like allocation fund with much better risk attribute.  In my world, it's FREE LUNCH, just like PRWCX and USNM have.  Over the years it's rare to find free lunch funds but they exist and then I load.   IMO, PIMIX managers made tactical moves I have never seen before.  You add high ER and huge AUM and it's going to be very hard for the managers to beat other MS funds on performance+risk attributes as they did before.

==============================

Desmo, Does your calculation include or exclude the August div?  You can use stockchart for that see (chart) and it should include all dist.  It looks like PIMIX is down 0.9% from its last top...PCI is down just over 1%...PDI down just under 1.5%.  Sometimes it's not accurate but close anyway.

===============================

cegibbs, FD - which bond funds are you using now?  the following is what I posted several days ago on another thread, 

Below is the Multi funds I like.  It's a 3-year history(link)

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
SEMMX5.41% 0.76%6.19%2.55%-0.38% 4.5412.33
VCFAX5.43% 1.66%8.13%0.51%-1.11% 2.395.63
JMUTX5.41% 1.94%7.52%0.44%-1.09% 2.054.68
JGIAX5.08% 2.41%8.37%0.57%-1.75% 1.543.1
PUCZX7.00% 2.24%8.70%1.75%-1.13% 2.446.82
PDIIX6.23% 3.49%10.30%-0.99%-2.23% 1.372.98

 

And then since 12/31/2017.

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
SEMMX4.71% 0.90%3.89%3.53%-0.38% 2.815.97
VCFAX4.88% 1.52%5.59%2.13%-0.28% 1.94.98
JGIAX5.77% 2.68%8.37%0.85%-0.97% 1.43.26
JMUTX4.97% 2.31%7.52%0.44%-1.09% 1.282.9
PUCZX6.57% 2.77%8.70%1.75%-1.13% 1.624.1
PDIIX5.72% 3.93%10.30%-0.99%-1.37% 0.942.4
PIMIX4.01% 1.92%5.81%0.58%-0.75% 1.072.41

 

Comments

1) PIMIX lost its mojo but even PDIIX numbers are not good compared to the others with much higher SD.  PDIIX has a small AUM so you can't claim a huge AUM like PIMIX.  PUCZX made more + had better SD.  Both PIMIX+PDIIX has the lowest Sharpe+Sortino combo.

2) SEMMX is the best fund for 3 years + since 12/31/2017 based on Sharpe+Sortino + close performance.  BUT YTD, it lags badly at 3.6% while JMUTX+JMSIX more than doubled that at 8.1-9%

3) VCFAX is a good sub for PIMIX with second-lowest SD.

4) JMUTX+JGIAX/JMSIX are close.  JMUTX has a lower SD but performance can be higher/lower than JMSIX.

5) PUCZX is a surprise, the 3 year numbers are excellent.

Based on the above I would rate a LT hold as following

1) SEMMX SD is extremely low, any retiree that wants to achieve at least 5% with low SD and has low % stocks (20-30%) can use this fund as a cash sub.

2) VCFAX is an easy hold

3) JMUTX,JMSIX are close but I prefer JMUTX because of lower SD and

4) I would go with PUCZX instead of JMSIX

Basically for LT investors: SEMMX,VCFAX,JMUTX,PUCZX

But as a trader and not recommended to anybody, right now I own JMUTX,JMSIX, HY Muni. The reasons are: 1) SEMMX lags  2) HY Munis performed much better than VCFAX   3) JMUTX,JMSIX are my flexible MS funds

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Re: Dear PIMIX(the last straw = higher ER)


@FD1001 wrote:

Interest expenses on leverage have been counted already for months now.  The ER is higher than several weeks ago. If I'm not mistaken it was under 0.8% including interest expenses and now ER is higher by at least 0.2-0.3%.

===============================

cegibbs, FD - which bond funds are you using now?  the following is what I posted several days ago on another thread, 

Below is the Multi funds I like.  It's a 3-year history(link)

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
SEMMX5.41% 0.76%6.19%2.55%-0.38% 4.5412.33
VCFAX5.43% 1.66%8.13%0.51%-1.11% 2.395.63
JMUTX5.41% 1.94%7.52%0.44%-1.09% 2.054.68
JGIAX5.08% 2.41%8.37%0.57%-1.75% 1.543.1
PUCZX7.00% 2.24%8.70%1.75%-1.13% 2.446.82
PDIIX6.23% 3.49%10.30%-0.99%-2.23% 1.372.98

 

And then since 12/31/2017.

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
SEMMX4.71% 0.90%3.89%3.53%-0.38% 2.815.97
VCFAX4.88% 1.52%5.59%2.13%-0.28% 1.94.98
JGIAX5.77% 2.68%8.37%0.85%-0.97% 1.43.26
JMUTX4.97% 2.31%7.52%0.44%-1.09% 1.282.9
PUCZX6.57% 2.77%8.70%1.75%-1.13% 1.624.1
PDIIX5.72% 3.93%10.30%-0.99%-1.37% 0.942.4
PIMIX4.01% 1.92%5.81%0.58%-0.75% 1.072.41

 

Comments

1) PIMIX lost its mojo but even PDIIX numbers are not good compared to the others with much higher SD.  PDIIX has a small AUM so you can't claim a huge AUM like PIMIX.  PUCZX made more + had better SD.  Both PIMIX+PDIIX has the lowest Sharpe+Sortino combo.

2) SEMMX is the best fund for 3 years + since 12/31/2017 based on Sharpe+Sortino + close performance.  BUT YTD, it lags badly at 3.6% while JMUTX+JMSIX more than doubled that at 8.1-9%

3) VCFAX is a good sub for PIMIX with second-lowest SD.

4) JMUTX+JGIAX/JMSIX are close.  JMUTX has a lower SD but performance can be higher/lower than JMSIX.

5) PUCZX is a surprise, the 3 year numbers are excellent.

Based on the above I would rate a LT hold as following

1) SEMMX SD is extremely low, any retiree that wants to achieve at least 5% with low SD and has low % stocks (20-30%) can use this fund as a cash sub.

2) VCFAX is an easy hold

3) JMUTX,JMSIX are close but I prefer JMUTX because of lower SD and

4) I would go with PUCZX instead of JMSIX

Basically for LT investors: SEMMX,VCFAX,JMUTX,PUCZX

But as a trader and not recommended to anybody, right now I own JMUTX,JMSIX, HY Muni. The reasons are: 1) SEMMX lags  2) HY Munis performed much better than VCFAX   3) JMUTX,JMSIX are my flexible MS funds



@FD1001 wrote:

Interest expenses on leverage have been counted already for months now.  The ER is higher than several weeks ago. If I'm not mistaken it was under 0.8% including interest expenses and now ER is higher by at least 0.2-0.3%.

==============================

DT:You have had this love/hate relationship with PIMIX for the last few years.  Absolutely, it was my biggest % holding fund ever for several years at 40-50% and more.  In the last several years and especially in 2018-2019 I found much better options for performance + risk attributes.  It used to be very difficult to beat PIMIX.  It had a performance like allocation fund with much better risk attribute.  In my world, it's FREE LUNCH, just like PRWCX and USNM have.  Over the years it's rare to find free lunch funds but they exist and then I load.   IMO, PIMIX managers made tactical moves I have never seen before.  You add high ER and huge AUM and it's going to be very hard for the managers to beat other MS funds on performance+risk attributes as they did before.

==============================

Desmo, Does your calculation include or exclude the August div?  You can use stockchart for that see (chart) and it should include all dist.  It looks like PIMIX is down 0.9% from its last top...PCI is down just over 1%...PDI down just under 1.5%.  Sometimes it's not accurate but close anyway.

===============================

cegibbs, FD - which bond funds are you using now?  the following is what I posted several days ago on another thread, 

Below is the Multi funds I like.  It's a 3-year history(link)

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
SEMMX5.41% 0.76%6.19%2.55%-0.38% 4.5412.33
VCFAX5.43% 1.66%8.13%0.51%-1.11% 2.395.63
JMUTX5.41% 1.94%7.52%0.44%-1.09% 2.054.68
JGIAX5.08% 2.41%8.37%0.57%-1.75% 1.543.1
PUCZX7.00% 2.24%8.70%1.75%-1.13% 2.446.82
PDIIX6.23% 3.49%10.30%-0.99%-2.23% 1.372.98

 

And then since 12/31/2017.

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
SEMMX4.71% 0.90%3.89%3.53%-0.38% 2.815.97
VCFAX4.88% 1.52%5.59%2.13%-0.28% 1.94.98
JGIAX5.77% 2.68%8.37%0.85%-0.97% 1.43.26
JMUTX4.97% 2.31%7.52%0.44%-1.09% 1.282.9
PUCZX6.57% 2.77%8.70%1.75%-1.13% 1.624.1
PDIIX5.72% 3.93%10.30%-0.99%-1.37% 0.942.4
PIMIX4.01% 1.92%5.81%0.58%-0.75% 1.072.41

 

Comments

1) PIMIX lost its mojo but even PDIIX numbers are not good compared to the others with much higher SD.  PDIIX has a small AUM so you can't claim a huge AUM like PIMIX.  PUCZX made more + had better SD.  Both PIMIX+PDIIX has the lowest Sharpe+Sortino combo.

2) SEMMX is the best fund for 3 years + since 12/31/2017 based on Sharpe+Sortino + close performance.  BUT YTD, it lags badly at 3.6% while JMUTX+JMSIX more than doubled that at 8.1-9%

3) VCFAX is a good sub for PIMIX with second-lowest SD.

4) JMUTX+JGIAX/JMSIX are close.  JMUTX has a lower SD but performance can be higher/lower than JMSIX.

5) PUCZX is a surprise, the 3 year numbers are excellent.

Based on the above I would rate a LT hold as following

1) SEMMX SD is extremely low, any retiree that wants to achieve at least 5% with low SD and has low % stocks (20-30%) can use this fund as a cash sub.

2) VCFAX is an easy hold

3) JMUTX,JMSIX are close but I prefer JMUTX because of lower SD and

4) I would go with PUCZX instead of JMSIX

Basically for LT investors: SEMMX,VCFAX,JMUTX,PUCZX

But as a trader and not recommended to anybody, right now I own JMUTX,JMSIX, HY Muni. The reasons are: 1) SEMMX lags  2) HY Munis performed much better than VCFAX   3) JMUTX,JMSIX are my flexible MS funds


@FD1001 Thanks. It would be hard to ask for a more consise opinion and research .Thanks again. -RM
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Frequent Contributor

Re: Dear PIMIX(the last straw = higher ER)

Isn’t PIMIX being pummeled in the bond holders thread due to a price decline because Argentina may default on 100 year bonds which the fund holds? Don’t know why anyone invests in foreign bonds of unstable countries.

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Re: Dear PIMIX(the last straw = higher ER)

I expect PIMIX to advance quite a bit today..

edit after today's price is posted: I eat my words, PIMIX dropped another 0.25% today. 

How many of you are considering exit versus sticking it out?

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