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Post by chang on Jan 27, 2021 1:18:35 GMT
Norbert You mentioned elsewhere that you like some MS funds. I haven't been able to find one that jumped out at me. I actually own various sectors separately (HY- VWEAX, NT-PMZIX, IG Corp- PIGIX/DODIX) so I am not sure I need one. I am also happy at the moment parking cash in VUSFX (UST) and focusing on equity. Is there a good, trustworthy MS fund with low expenses, limited duration, a healthy yield, and a good 5+ yr record? So many MS funds have done so badly that I formed a theory that the flexibility to go anywhere might be a liability, or rather, a temptation to chase yield and take on extra hidden risks.
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Post by chang on Jan 27, 2021 3:41:37 GMT
MFO Quick Search is a good starting point to look within a category. I usually screen by MFO Rating "4 to 5", then look for the GO (Great Owls) and lowest ERs. I check 3- and 5-years. CSHTX (probably not purchasable) and GIBIX (highest Sharpe on the list) look like they're worth a look. FIXD, too. But GIBIX has a 7.46 yr duration! And FIXD has a SEC yield of 0.72%, TTM yield of 1.97%. See why I can't find a MS fund I like? Reminder: VWEAX has a 3.4 yr duration, 3.16% SEC yield, 4.71% TTM yield, and 0.13% ER. Is this such a bad fund to own?
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Post by fred495 on Jan 27, 2021 4:53:50 GMT
chang said: "See why I can't find a MS fund I like?"
They may not meet all of your requirements, but here are two multi-sector bond funds with excellent risk/reward profiles you may want to check out: RCTIX and TSIIX. And, if you are open to venturing into the non-traditional bond fund category, you may want to look at CLMAX and SUBFX.
Good luck,
Fred
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Post by Norbert on Jan 27, 2021 7:47:23 GMT
changMy largest MS Bond position is in PTIAX. It's very diversified and actively managed. The principle advantage over VWEAX is the low correlation to stocks, as returns are comparable. Volatility is better, in case you care. Read here: ptam.com/mutual-funds/ptiax.htmlI didn't spot the duration info, but the fund commentary tells me that the management understands the rate issue. For better or for worse, I care more about total return than yield. On the MS Bond Front, my leaning is towards higher quality, combined with the flexibility to mitigate the effect of rising rates.
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Post by chang on Jan 27, 2021 9:32:58 GMT
Thanks Norbert fred495 . I have seen PTIAX mentioned before, but I haven't looked deeply into this fund, or the other funds which are often discussed in MS (or any other bond fund category, for that matter) discussions. For some reason, when I read the usual "bond fund threads" I feel like I'm drowning in alphabet soup. I guess that means we have a plethora of choices, which is a good thing. HERE is a 5yr chart of PTIAX vs the funds I own: VWEAX, PIGIX, DODIX. The case for adding PTIAX doesn't seem strong on the basis of this picture. I'll admit it does appear to be the least volatile of the bunch, which becomes clearer when you switch to a rolling returns view. On a 10yr view, PTIAX closes the gap, relatively speaking, and looks pretty decent. (Interestingly, DODIX is the laggard on the 10yr chart but the leader on the 1yr chart.) I don't know exactly why, but I never warm to any of the MS funds I look at. I suppose my expectations are high, since by definition they can "go anywhere", and therefore they should be in the right place at the right time, all the time, if the managers know what they're doing. Yet ... they often do no better than monostrategy funds, and surprisingly they often do worse. Indeed, look at the "Category" curve, which represents the entire MS category. Even boring, vanilla DODIX kills it. Your pick does seem to be a good one, though. Note: Fred's CLMAX and TSIIX look pretty good on this chart (SUBFX not so good). However, over 5-10yr, VWEAX and PIGIX are still ahead of them all. Since I've owned these funds for a long time, it's hard for me to justify moving into something else.
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Post by Chahta on Jan 27, 2021 12:55:46 GMT
chang My largest MS Bond position is in PTIAX. It's very diversified and actively managed. The principle advantage over VWEAX is the low correlation to stocks, as returns are comparable. Volatility is better, in case you care. Read here: ptam.com/mutual-funds/ptiax.htmlI didn't spot the duration info, but the fund commentary tells me that the management understands the rate issue. For better or for worse, I care more about total return than yield. On the MS Bond Front, my leaning is towards higher quality, combined with the flexibility to mitigate the effect of rising rates. You will need to call PT to get duration info. It is not published because they don't want it published. I talked to them about another fund, PTIMX which doesn't publish duration either. MS funds are a bit like AA funds. You need to trust them to change allocations as they see fit. No down year in the last 6 years. I bought it at more depressed prices last year.
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Post by rhythmmethod on Jan 27, 2021 15:09:44 GMT
chang My largest MS Bond position is in PTIAX. It's very diversified and actively managed. The principle advantage over VWEAX is the low correlation to stocks, as returns are comparable. Volatility is better, in case you care. Read here: ptam.com/mutual-funds/ptiax.htmlI didn't spot the duration info, but the fund commentary tells me that the management understands the rate issue. For better or for worse, I care more about total return than yield. On the MS Bond Front, my leaning is towards higher quality, combined with the flexibility to mitigate the effect of rising rates. I have long thought PTIAX would be a great addition (perhaps I still do but, less so). It is unavailable at VG. Now that I have an account at Fidelity I can purchase it. If one looks at that performance VS PIMIX (which seems to be an easy to dis-like fund), why is it that much better? I'm probably going to open PTIAX for the sake of diversification but am less enthusiastic about it.
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Post by Norbert on Jan 27, 2021 16:10:19 GMT
rhythmmethodPTIAX is nothing spectacular. It's got lower trailing returns than PIMIX and won't serve as a true equity hedge like the long bond (e.g. TLT). But, I made a place for it in my portfolio because of the high quality ratings, the diversified holdings, and the low correlation to equities. Like you, I hold PIMIX, however I did lighten my position a while back because of the massive AUM. Also, PIMIX has a higher correlation to equities.
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Post by rhythmmethod on Jan 27, 2021 17:43:58 GMT
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Post by acksurf on Jan 28, 2021 1:17:13 GMT
PTIAX is also my largest holding. I like what seems to be relatively low volatility. At the moment, in terms of straight bond funds, I only hold this and 2 muni Fidelity funds. As a reminder, I am not retired so not overly concerned with income - just holding place for short-medium term needs. I hold Wellesley and SCHD for that purpose.
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Post by anovice on Jan 29, 2021 13:40:51 GMT
Thanks Norbert fred495 . I have seen PTIAX mentioned before, but I haven't looked deeply into this fund, or the other funds which are often discussed in MS (or any other bond fund category, for that matter) discussions. For some reason, when I read the usual "bond fund threads" I feel like I'm drowning in alphabet soup. I guess that means we have a plethora of choices, which is a good thing. HERE is a 5yr chart of PTIAX vs the funds I own: VWEAX, PIGIX, DODIX. The case for adding PTIAX doesn't seem strong on the basis of this picture. I'll admit it does appear to be the least volatile of the bunch, which becomes clearer when you switch to a rolling returns view. On a 10yr view, PTIAX closes the gap, relatively speaking, and looks pretty decent. (Interestingly, DODIX is the laggard on the 10yr chart but the leader on the 1yr chart.) I don't know exactly why, but I never warm to any of the MS funds I look at. I suppose my expectations are high, since by definition they can "go anywhere", and therefore they should be in the right place at the right time, all the time, if the managers know what they're doing. Yet ... they often do no better than monostrategy funds, and surprisingly they often do worse. Indeed, look at the "Category" curve, which represents the entire MS category. Even boring, vanilla DODIX kills it. Your pick does seem to be a good one, though. Note: Fred's CLMAX and TSIIX look pretty good on this chart (SUBFX not so good). However, over 5-10yr, VWEAX and PIGIX are still ahead of them all. Since I've owned these funds for a long time, it's hard for me to justify moving into something else.
I do not like VWEAX with a 30 day SEC yield of 3.14%. While a conservative one, it's nevertheless a junk bond fund. I would rather be in VWIAX with a 30 day SEC yield of 1.96% and let the fund manage the equity and interest rate components.
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Post by FD1000 on Jan 29, 2021 20:55:57 GMT
Thanks Norbert fred495 . I have seen PTIAX mentioned before, but I haven't looked deeply into this fund, or the other funds which are often discussed in MS (or any other bond fund category, for that matter) discussions. For some reason, when I read the usual "bond fund threads" I feel like I'm drowning in alphabet soup. I guess that means we have a plethora of choices, which is a good thing. HERE is a 5yr chart of PTIAX vs the funds I own: VWEAX, PIGIX, DODIX. The case for adding PTIAX doesn't seem strong on the basis of this picture. I'll admit it does appear to be the least volatile of the bunch, which becomes clearer when you switch to a rolling returns view. On a 10yr view, PTIAX closes the gap, relatively speaking, and looks pretty decent. (Interestingly, DODIX is the laggard on the 10yr chart but the leader on the 1yr chart.) I don't know exactly why, but I never warm to any of the MS funds I look at. I suppose my expectations are high, since by definition they can "go anywhere", and therefore they should be in the right place at the right time, all the time, if the managers know what they're doing. Yet ... they often do no better than monostrategy funds, and surprisingly they often do worse. Indeed, look at the "Category" curve, which represents the entire MS category. Even boring, vanilla DODIX kills it. Your pick does seem to be a good one, though. Note: Fred's CLMAX and TSIIX look pretty good on this chart (SUBFX not so good). However, over 5-10yr, VWEAX and PIGIX are still ahead of them all. Since I've owned these funds for a long time, it's hard for me to justify moving into something else.
I do not like VWEAX with a 30 day SEC yield of 3.14%. While a conservative one, it's nevertheless a junk bond fund. I would rather be in VWIAX with a 30 day SEC yield of 1.96% and let the fund manage the equity and interest rate components.
We are talking about Multi sector funds. VWEAX+VWIAX are both not MS funds + comparing VWEAX to VWIAX is apples to oranges + the managers don't do overly of managing the bond side of VWIAX with their options. To manage the bond portion you need to use different bonds categories which is what MS fund has. So where can you find what the OP wants "low expenses, limited duration, a healthy yield"? It doesn't exist, it you can find that, there are millions of investors who would use it The best "simple" 2 options are PTIAX and TSIIX but they are not cheap. TSIIX ER=0.6%. CLMAX could be an option if you don't care about these pesky special securitized bonds. Atherr options are the following 3 NonTrad funds: PMZIX,PUTIX,MNCPX. For 3 years, all have performance>4 and SD<4 (PUTIX<3). Nothing is a guarantee of course. See below NonTrad then MS tablesAttachments:
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Post by chang on Feb 1, 2021 4:49:38 GMT
Thanks Norbert fred495 . I have seen PTIAX mentioned before, but I haven't looked deeply into this fund, or the other funds which are often discussed in MS (or any other bond fund category, for that matter) discussions. For some reason, when I read the usual "bond fund threads" I feel like I'm drowning in alphabet soup. I guess that means we have a plethora of choices, which is a good thing. HERE is a 5yr chart of PTIAX vs the funds I own: VWEAX, PIGIX, DODIX. The case for adding PTIAX doesn't seem strong on the basis of this picture. I'll admit it does appear to be the least volatile of the bunch, which becomes clearer when you switch to a rolling returns view. On a 10yr view, PTIAX closes the gap, relatively speaking, and looks pretty decent. (Interestingly, DODIX is the laggard on the 10yr chart but the leader on the 1yr chart.) I don't know exactly why, but I never warm to any of the MS funds I look at. I suppose my expectations are high, since by definition they can "go anywhere", and therefore they should be in the right place at the right time, all the time, if the managers know what they're doing. Yet ... they often do no better than monostrategy funds, and surprisingly they often do worse. Indeed, look at the "Category" curve, which represents the entire MS category. Even boring, vanilla DODIX kills it. Your pick does seem to be a good one, though. Note: Fred's CLMAX and TSIIX look pretty good on this chart (SUBFX not so good). However, over 5-10yr, VWEAX and PIGIX are still ahead of them all. Since I've owned these funds for a long time, it's hard for me to justify moving into something else. I do not like VWEAX with a 30 day SEC yield of 3.14%. While a conservative one, it's nevertheless a junk bond fund. I would rather be in VWIAX with a 30 day SEC yield of 1.96% and let the fund manage the equity and interest rate components. It sounds like you have a beef with HY as an investment. That's OK; HY has definitely had its ugly periods. A couple of years ago Norbert did some specific comparisons of VWIAX to VWEAX and provided some compelling stats to suggest Wellesley was a better LT investment. I happen to own both. My point is that there is nothing special about MS: it is just a flexible category that can own everything. To repeat what I said above: I find the MS category disappointing. It should rise above all the others, but in fact it doesn't. The average MS fund is overpriced and underperforms IMO. If most MS funds don't seem to capitalize on their flexibility, then I would just as soon own low cost, best-in-class municipal, IG corporate, HY and maybe NT bond funds. And that's what I do. And for the record, Wellesley is a great "sleep easy" fund. I expect to add to it in the future, and I cannot imagine ever selling any.
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Post by Norbert on Feb 1, 2021 6:49:44 GMT
changVery interesting thesis: slice & dice bond funds is better than MS bond fund. I'd like to explore this. Could you list your favorite bond for each category you hold, with percentages? I'd like to compare to my PTIAX and PIMIX. It's a tricky comparison, because of debatable purpose of holding bonds: ballast vs. income/returns. I'm assuming B&H in a tax-protected account. (Munis in a taxable account are a different matter.)
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Post by chang on Feb 1, 2021 7:16:51 GMT
chang Very interesting thesis: slice & dice bond funds is better than MS bond fund. I'd like to explore this. Could you list your favorite bond for each category you hold, with percentages? I'd like to compare to my PTIAX and PIMIX. It's a tricky comparison, because of debatable purpose of holding bonds: ballast vs. income/returns. I'm assuming B&H in a tax-protected account. (Munis in a taxable account are a different matter.) Admission: I really haven't thought this through. But let's start with this chart of 3 MS funds overlayed with PIGIX, DODIX, VWEAX and PMZIX. Here's what I see over 3 years: - PIGIX beats them all
- Next comes DODIX and VWEAX
- The MS Category average is the worst of all
Of course, this is a pretty poor analysis. I should really do a variety of different analyses: maybe forget specific funds, and look at the categories for IG Corp, HY, NT and MS to compare averages to averages, and then pick a sample of good funds from each. I should also look at different time frames and, of course, rolling returns. I haven't done this. But, as I say again: MS has the ability to go anywhere; therefore, to be in the right place at the right time -- all the time. It should rise to the top of all categories over any time frame. But it doesn't. On the contrary, I think MS disappoints. HERE is the same chart with a few different taxable bond categories shown. How does MS look? My own personal funds were cobbled together at different times and for different reasons; they don't represent a coordinated portfolio. I own PIGIX and DODIX (IG Corp/IT); VWEAX (HY), PMZIX (NT), and VUSFX and RPHIX (ST cash). Plus more corps in VWIAX and VGWAX. Plus muni funds. I have looked at MS funds on a number of occasions. Maybe my expectations are too high. But they are all expensive ... where's the beef? But I haven't answered your question. What's my "roll your own" MS fund recommendation? I'll admit it: I am not even remotely qualified to answer the question. But I have an excuse: bonds are mostly ballast to me. I don't expect that much from them. I don't need to create any magic formula. I just want steady growth on autopilot with no drama. Maybe I just justified why I should own a MS fund.... but I can't help but to avoid high ER funds. If a bond fund is going to return 2-3% over the long term, then a 1% ER means the underlying portfolio is generating 3-4% and I am paying 1/4 - 1/3 of my return to the manager. Too high! And, of course, I don't believe in any free lunches: if two funds have the same return, the one with a higher ER is taking more risk. Sorry for a pretty disorganized, illogical reply. What can I say, I'm not a bond guy and never will be.
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Post by FD1000 on Feb 1, 2021 13:49:47 GMT
PIGIX, DODIX, VWEAX and PMZIX
Hindsight 2020 is a wonderful thing. In the last 3 years rates decrease dramatically + a black swan showed up in March 2020. What category should do best? high-rated bonds. Let me "guess" BIV and definitely TLT were better in the last 3 years.
Are rates going down dramatically anymore? Example: Is there any chance the excellent fund DODIX will make 6% average in the next 3 years as it did in the last 3 years? How about 3-4%? I doubt it when 30 day sec = 1.6%
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Post by Chahta on Feb 1, 2021 15:23:12 GMT
chang Very interesting thesis: slice & dice bond funds is better than MS bond fund. I'd like to explore this. Could you list your favorite bond for each category you hold, with percentages? I'd like to compare to my PTIAX and PIMIX. It's a tricky comparison, because of debatable purpose of holding bonds: ballast vs. income/returns. I'm assuming B&H in a tax-protected account. (Munis in a taxable account are a different matter.) Admission: I really haven't thought this through. But let's start with this chart of 3 MS funds overlayed with PIGIX, DODIX, VWEAX and PMZIX. Here's what I see over 3 years: - PIGIX beats them all
- Next comes DODIX and VWEAX
- The MS Category average is the worst of all
Of course, this is a pretty poor analysis. I should really do a variety of different analyses: maybe forget specific funds, and look at the categories for IG Corp, HY, NT and MS to compare averages to averages, and then pick a sample of good funds from each. I should also look at different time frames and, of course, rolling returns. I haven't done this. But, as I say again: MS has the ability to go anywhere; therefore, to be in the right place at the right time -- all the time. It should rise to the top of all categories over any time frame. But it doesn't. On the contrary, I think MS disappoints. HERE is the same chart with a few different taxable bond categories shown. How does MS look? My own personal funds were cobbled together at different times and for different reasons; they don't represent a coordinated portfolio. I own PIGIX and DODIX (IG Corp/IT); VWEAX (HY), PMZIX (NT), and VUSFX and RPHIX (ST cash). Plus more corps in VWIAX and VGWAX. Plus muni funds. I have looked at MS funds on a number of occasions. Maybe my expectations are too high. But they are all expensive ... where's the beef? But I haven't answered your question. What's my "roll your own" MS fund recommendation? I'll admit it: I am not even remotely qualified to answer the question. But I have an excuse: bonds are mostly ballast to me. I don't expect that much from them. I don't need to create any magic formula. I just want steady growth on autopilot with no drama. Maybe I just justified why I should own a MS fund.... but I can't help but to avoid high ER funds. If a bond fund is going to return 2-3% over the long term, then a 1% ER means the underlying portfolio is generating 3-4% and I am paying 1/4 - 1/3 of my return to the manager. Too high! And, of course, I don't believe in any free lunches: if two funds have the same return, the one with a higher ER is taking more risk. Sorry for a pretty disorganized, illogical reply. What can I say, I'm not a bond guy and never will be. While not everyone invests for yield, that is the stated goal of PTIAX and PIMIX. I believe that would be the goal of many MS funds. Look at the 30 day SEC yield of PTIAX+PIMIX+TSIIX vs PIGIX+DODIX. For some reason bond OEFs get judged as TR investments not income investments.
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Post by FD1000 on Feb 1, 2021 16:56:37 GMT
FREE LUNCH: any time a fund has similar performance with lower SD, it's a free lunch...or higher performance with similar SD is also free lunch. The best free lunch is when performance + SD are better. 2 easy Examples: SPY vs EEM in the last 10 years. Performance aver annually 13.4% vs 3.7%. SD: 13.5 vs 17.8. Huge free lunch PRWCX vs SPY since 2000: ( link). PRWCX ER is a lot higher. I can show more ===================== Posted by Chahta: While not everyone invests for yield, that is the stated goal of PTIAX and PIMIX. I believe that would be the goal of many MS funds. Look at the 30 day SEC yield of PTIAX+PIMIX+TSIIX vs PIGIX+DODIX. For some reason bond OEFs get judged as TR investments not income investments. I only judge investment based on TR first then risk attributes (SD, Max Draw, Sharpe, other) income comes last, if income is all you care then you should look for the highest dist investments. Easy question: suppose you knew that 2 funds have the same risk attributes.If you also knew that fund A will make 6% annually with zero distribution while Fund B generates 4% annually all distributions...which fund would you select?
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Post by chang on Feb 1, 2021 17:03:22 GMT
Chahta "While not everyone invests for yield, that is the stated goal of PTIAX and PIMIX. I believe that would be the goal of many MS funds. Look at the 30 day SEC yield of PTIAX+PIMIX+TSIIX vs PIGIX+DODIX. For some reason bond OEFs get judged as TR investments not income investments." Excellent observation. You may have noticed that I didn't mention yield at all. Frankly, I forgot all about it, because that isn't an objective for me. Perhaps that explains why I have never found the MS category to be of interest to me. It may simply be that it prioritizes delivery of a product that I don't need.
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Post by Karen on Feb 1, 2021 17:44:48 GMT
It always troubles my husband and me when people make up their own definitions for terms or phrases that actually have defined meanings. Free lunch is defined in investing terms as www.investopedia.com/terms/f/free-lunch.aspWhat Is a Free Lunch? A free lunch refers to a situation where there is no cost incurred by the individual receiving the goods or services being provided. In the world of investing, free lunch usually refers to riskless profit, which has been proven to be unattainable for any extended period of time.So any use of the phrase in relation to investing that includes profit derived from risk is incorrect (and FWIW, meaningless to my husband and me).
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Post by Chahta on Feb 1, 2021 17:51:17 GMT
FREE LUNCH: any time a fund has similar performance with lower SD, it's a free lunch...or higher performance with similar SD is also free lunch. The best free lunch is when performance + SD are better. 2 easy Examples: SPY vs EEM in the last 10 years. Performance aver annually 13.4% vs 3.7%. SD: 13.5 vs 17.8. Huge free lunch PRWCX vs SPY since 2000: ( link). PRWCX ER is a lot higher. I can show more ===================== Posted by Chahta: While not everyone invests for yield, that is the stated goal of PTIAX and PIMIX. I believe that would be the goal of many MS funds. Look at the 30 day SEC yield of PTIAX+PIMIX+TSIIX vs PIGIX+DODIX. For some reason bond OEFs get judged as TR investments not income investments. I only judge investment based on TR first then risk attributes (SD, Max Draw, Sharpe, other) income comes last, if income is all you care then you should look for the highest dist investments. Easy question: suppose you knew that 2 funds have the same risk attributes.If you also knew that fund A will make 6% annually with zero distribution while Fund B generates 4% annually all distributions...which fund would you select? I get it. I own equities for the same reason, TR. But not everyone wants to consume shares for income. Following the 6% idea, once the NAV increases stop you need to trade the fund and buy another to be of any use for income. Your argument in reverse; suppose you knew that 2 funds have the same risk attributes. If you also knew that fund A will make 0% for one year after making 6% last year with zero distribution while Fund B generates 4% annually all distributions...which fund would you select? I totally understand the FD method of TR. But many people want to take the "guaranteed income". Also MS funds can act as "diversifiers" against sequence of return risk. You can get income and not sell shares to cannibalize your principal. But they must be good long term performers with history showing the NAV can recover.
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Post by Chahta on Feb 1, 2021 18:09:45 GMT
Chahta "While not everyone invests for yield, that is the stated goal of PTIAX and PIMIX. I believe that would be the goal of many MS funds. Look at the 30 day SEC yield of PTIAX+PIMIX+TSIIX vs PIGIX+DODIX. For some reason bond OEFs get judged as TR investments not income investments." Excellent observation. You may have noticed that I didn't mention yield at all. Frankly, I forgot all about it, because that isn't an objective for me. Perhaps that explains why I have never found the MS category to be of interest to me. It may simply be that it prioritizes delivery of a product that I don't need. Yes, exactly. But sharp traders and investors, like FD1000, have learned to use them to their advantage making TR. IMHO the fund companies developed these products as income generators primarily. I have used this example before, but if you bought PIMIX in August 2012 ($12.11) you would have paid what the NAV is today ($12.11) and collected a nice 5% all those years. But the price was up and down in between, and was at $12.11 several times in between too. That's the income idea.
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Post by anitya on Feb 1, 2021 18:14:58 GMT
Many of us aspire to be B&H because we all like certainty. But how many on this forum is a B&H of active funds in practice (not by circumstance e.g., tax handcuffs)? No need to answer. If not, why constrain yourself by thinking that is what you would like.
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Post by Chahta on Feb 1, 2021 18:16:37 GMT
It always troubles my husband and me when people make up their own definitions for terms or phrases that actually have defined meanings. Free lunch is defined in investing terms as www.investopedia.com/terms/f/free-lunch.aspWhat Is a Free Lunch? A free lunch refers to a situation where there is no cost incurred by the individual receiving the goods or services being provided. In the world of investing, free lunch usually refers to riskless profit, which has been proven to be unattainable for any extended period of time.So any use of the phrase in relation to investing that includes profit derived from risk is incorrect (and FWIW, meaningless to my husband and me). My definition of a "free lunch" is the invitation I get for an investing seminar. They think they are going to separate me from my money because they are good talkers, have scary buzzwords and a nice presentation. But I have decided to separate them from their food first. Free for me but not them. LOL!
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Post by FD1000 on Feb 1, 2021 21:29:11 GMT
Chahta "While not everyone invests for yield, that is the stated goal of PTIAX and PIMIX. I believe that would be the goal of many MS funds. Look at the 30 day SEC yield of PTIAX+PIMIX+TSIIX vs PIGIX+DODIX. For some reason bond OEFs get judged as TR investments not income investments." Excellent observation. You may have noticed that I didn't mention yield at all. Frankly, I forgot all about it, because that isn't an objective for me. Perhaps that explains why I have never found the MS category to be of interest to me. It may simply be that it prioritizes delivery of a product that I don't need. Yes, exactly. But sharp traders and investors, like FD1000, have learned to use them to their advantage making TR. IMHO the fund companies developed these products as income generators primarily. I have used this example before, but if you bought PIMIX in August 2012 ($12.11) you would have paid what the NAV is today ($12.11) and collected a nice 5% all those years. But the price was up and down in between, and was at $12.11 several times in between too. That's the income idea. PIMIX worked not because it's income but because it had great risk/reward and income was the icing on the cake. Great income without good risk/reward doesn't work. I can find several high income funds with bad risk/reward. Just my opinion. Fund companies always try to build myths, it's called marketing, I call it BS.
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Post by Chahta on Feb 2, 2021 13:28:34 GMT
Please define risk/reward for me. I see many folks using that term but I am not clear on the math. Risk = SD, CAGR, DD, Sortino etc.? How is reward measured? Past growth? Thanks.
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Post by FD1000 on Feb 2, 2021 19:01:52 GMT
Please define risk/reward for me. I see many folks using that term but I am not clear on the math. Risk = SD, CAGR, DD, Sortino etc.? How is reward measured? Past growth? Thanks. Easiest is looking at risk attributes, see PV(SD,Max Draw, Sharpe, Sortino). That's a good start. Example: PIMIX vs TSIIX. PV( link) shows it's an easy call. TSIIX is better in every column. If you look all the way to the bottom, you can see income, and PIMIX income was much better, but higher income isn't a guarantee for a better risk/reward. I looked for an easy example, many times it's not easy and of course, past performance doesn't guaranty future performance.
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Post by chang on Feb 3, 2021 3:46:33 GMT
I've been doing a little searching and filtering. What I've come up with is: RCTIX, PTIAX, TSIIX, CLMVX CHART (vs PIMIX as the "classic" MS fund favorite, although I wouldn't touch it) The last one (Columbia Mortgage) has the best record but also looks like a black box. Manager investment in the fund is not impressive. (If you don't care about that, there's no need to post "I don't care about that". I do.) The best March-2020 performers were TSIIX, PTIAX and RCTIX -- all about equal. Here are some stats that matter to me: TSIIX PTIAX RCTIX M* stars 4* 4* 4*
TTM Yield 3.81% 3.91% 3.51%Duration 2.48 ? 2.59Expense ratio 0.60 0.79 0.68
Avg. Mgr. tenure 7y 10.5y 6.2yManager investment Good Poor OK ("Good" = at least 1 manager has > $1m)
There isn't a whole lot that separates these funds. When in doubt, I go to the lowest ER. That would be TSIIX. Can anyone make an iron-clad case for a better MS fund? (Still very far from convinced it makes sense to buy, but willing to do some analysis to confirm that I'm not missing something. See the same chart with DODIX!)
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Post by Norbert on Feb 3, 2021 5:33:44 GMT
chang Personally, I still give the nod to PTIAX. Why? - Lower correlation to equity market (tends to zig when stocks zag); - Higher credit quality (mostly "A" and above bond ratings); - Reasonable combination of yield, total return, and volatility, resulting in good Sortino Ratio (if you care). My Yugo is better than the others.
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Post by chang on Feb 3, 2021 10:24:23 GMT
chang Personally, I still give the nod to PTIAX. Why? - Lower correlation to equity market (tends to zig when stocks zag); - Higher credit quality (mostly "A" and above bond ratings); - Reasonable combination of yield, total return, and volatility, resulting in good Sortino Ratio (if you care). My Yugo is better than the others. Fair enough. I ran PV using a mix of DODIX/PIGIX and VWEAX versus a bunch of other MS funds. My cocktails hold their own. I didn't check correlations to equities, but my cocktails tended to chart close alongside the MS funds, so I assume there are no major deviations with regard to correlations. I'm not up on Sortino ratio, but I don't find Sharpe ratio to be very helpful. It's excessively pumped up by low SD; but "super smoothness" isn't really an advantage for a LT investor. On the contrary, high SD can be valuable for an accumulator.
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