PMZIX - keeper?

[chang]

Relevant links:

www.pimco.com/en-us/investments/mutual-funds/mortgage-opportunities-and-bond-fund/inst
www.morningstar.com/funds/xnas/pmzix/quote

Results of a quick review:

• M* rating:                   ★★★
• SEC / TTM yield:          2.59% / 3.94%
• Duration:                    1.07 years
• Expenses:                   1.82% gross, 0.6% net
• YTD return:                 0.71%
• M* 3Y Risk / Return:    Low / Above Average

The gross ER caught my eye: 1.82%. That's a serious hurdle to overcome for the fund. The net ER isn't too egregious, but the gross is what matters when it comes to how the fund performs, i.e., raw returns less expenses.

This is my only "black box" fund. It didn't do badly in 2020: +5.46% return for a top 36% ranking in the NT category. Its 1-3-5 year rankings are in the top half of the category, but it isn't hitting home runs like it did in its first three years (2013-2015).

What do people think? The yield seems pretty good for a 1-yr duration fund, and while black boxes can implode, its history has been pretty stable. TIA.

[yogibearbull]

The ER terminology is confusing.

Total or gross ER includes everything. So, 1.82%

Net ER accounts for any temporary fee waivers [not the case hare]. So, still 1.82%

Adjusted ER [Pimco] or Management Actual [M*] excludes leverage and short-sales related costs. That is 0.60%. You are correct that holders bear full 1.82%. This data is not required by the SEC but the funds may use it along with the required data. For years, M* reported only this ER but M* is not a fund company. However, once M* got into advisory services and portfolio management, and became more subject to SEC and FINRA regulations, it also adjusted its fund ER terminology and ER reporting.

[rhythmmethod]

From what I am discerning about the matrix of your other FI holdings, adding/keeping PMZIX makes sense to me.