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Post by chang on Dec 22, 2023 6:28:38 GMT
With rates appearing to have peaked, I have three T-bills maturing in 1Q24, the first one in a couple of weeks. I was thinking Fidelity total bond FTBFX/FBND. The money is at Fido. I could move it over to VG if there’s a better VG option (I have accts at both). Morningstar recently listed “The 45 Best Bond Funds to Buy”: www.morningstar.com/funds/best-bond-fundsThoughts? Edit: VWEAX is conspicuous by its absence on the VG list. Edit 2: PIMIX beats FTBFX over most, not all, time periods. The amount maturing is about 2/3 of my PIMIX position. |
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Post by acksurf on Dec 22, 2023 11:53:43 GMT
Same dilemma except mine mature sooner. I am looking at PYLD - the new PIMCO active bond fund. Any thoughts on this one?
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Post by yogibearbull on Dec 22, 2023 12:10:11 GMT
It's time to extend maturities. I have stopped my T-Bill rolls.
Options may be m-mkt funds (they will act with some lag, so may be slow to respond to any rate declines), ultra-ST bond funds (USFR, ICSH), core-plus (FTBFX or ETF cousin FBND), multisector (PIMIX or ETF cousin PYLD). VWEAX is HY by name, may be core-plus by action. Many other choices exist in these categories.
I do have PYLD but that is in part that is simulating PRWCX with TCAF + PYLD.
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Post by chang on Dec 22, 2023 13:12:48 GMT
Fido says FTBFX ER = 0.45% while FBND ER = 0.36. Yet the TR charts of the two show essentially zero divergence back to FBND’s inception.
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Post by keppelbay on Dec 22, 2023 13:29:26 GMT
If you are comfortable leaving the short-term AAA space, I think it is an OK time to go with funds that actively manage duration and credit risk.
Unless you have strong views on what part of the bond market you want to be in, I'd suggest looking at multisector funds.
I'm partial to PIMIX. Over the longer term they outperformed the multisector category - though as FD likes to remind us, not by as much lately. They have also outperformed the category in the past 1 and 3 years, albeit be a smaller margin. Fidelity's FADMX and Western Asset Income fund SDSAX might also be worth a look.
You haven't said what your goal is for this investment, so I'll toss out a wild card: keep 2/3 of the funds in AAA rated agency bonds, yielding 5+% and put 1/3 into PAXS, WDI or equivalent. You get the stability of principal with most of the funds and take the capital risk for the go-go income and market recovery potential in the leveraged CEF with a smaller investment.
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Post by yogibearbull on Dec 22, 2023 14:40:23 GMT
In the "bond crash", inv-gr suffered more than HY or multisector. Core-plus is mostly inv-gr with some HY, so the data for FTBFX isn't surprising. I tend to stick with core-plus & multisector (corollary - I have no inv-gr, little HY), and assume that managers can do juggling better than I.
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Deleted
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Post by Deleted on Dec 22, 2023 14:49:03 GMT
I'm pondering the same things. I'm considering VMFXX, VUSB, and VGSH for my maturing T-bills.
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Post by yogibearbull on Dec 22, 2023 14:56:38 GMT
When I looked at VUSB a while ago, it had high duration/maturity in the ultra-ST bond group. So, I continued with USFR, ICSH; I even hold USFR in my VG brokerage a/c. If I need another, JPST may be next for me.
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Post by steadyeddy on Dec 22, 2023 15:02:09 GMT
I agree with yogibearbull that it is time to extend duration in our income assets. Also, MM funds are super fine for now until the market direction gets less euphoric. My new money will go into PYLD and VPLS - I have reasonable faith in Vanguard's ability to deliver Core-Plus results in a tamer fashion and perhaps less exciting than PYLD. As noted in another thread, I will slowly replace PIMIX/PONAX with PYLD just due to brokerage constraints that PIMCO has with their mutual funds. |
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Post by chang on Dec 22, 2023 15:16:57 GMT
I agree with yogibearbull that it is time to extend duration in our income assets. Also, MM funds are super fine for now until the market direction gets less euphoric. I don't quite follow. Those two statements seem contradictory. |
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Post by steadyeddy on Dec 22, 2023 15:20:30 GMT
I agree with yogibearbull that it is time to extend duration in our income assets. Also, MM funds are super fine for now until the market direction gets less euphoric. I don't quite follow. Those two statements seem contradictory. I wasn't very clear. What I meant is that the yield for MM funds is not going to drop that fast either. So, you have an option of hiding some money in MM and some money in interm-term bonds. Hope that helps. |
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Post by chang on Dec 22, 2023 15:21:40 GMT
Note - based on this, I'm sticking with PIMIX.
PIMIX
30-Day SEC Yield as of 11/30/2023 5.51%
Gross Expense Ratio 0.62%
Adjusted Expense Ratio 0.50%
PYLD
30-Day SEC Yield as of 11/30/2023 4.94-5.03%
Gross Expense Ratio 0.65%
Adjusted Expense Ratio 0.55%
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Post by racqueteer on Dec 22, 2023 15:25:20 GMT
I recently started dipping into (and occasionally out of) TLT. Any thoughts on that theme?
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Post by steadyeddy on Dec 22, 2023 15:30:31 GMT
I recently started dipping into (and occasionally out of) TLT. Any thoughts on that theme? I used to trade in TLT and had decent success in making small gains when sentiment has sudden swings. But the problem with holding sizeable TLT is if the interest rate expectations change, it could lose a lot of NAV. To me it is fine as a trading vehicle. |
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Post by steadyeddy on Dec 22, 2023 15:33:41 GMT
Note - based on this, I'm sticking with PIMIX. PIMIX
30-Day SEC Yield as of 11/30/2023 5.51%
Gross Expense Ratio 0.62%
Adjusted Expense Ratio 0.50%
PYLD
30-Day SEC Yield as of 11/30/2023 4.94-5.03%
Gross Expense Ratio 0.65%
Adjusted Expense Ratio 0.55%Most IT bond funds rose nicely along with equities in the last 8 weeks. PYLD went up 8%; PIMIX 6% in this short period. I think it is a short term bubble. If it was my money, I wouldn't be in a hurry to deploy it at the moment. I am currently accumulating cash and sitting it out. |
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Post by keppelbay on Dec 22, 2023 15:37:51 GMT
Note - based on this, I'm sticking with PIMIX. PIMIX
30-Day SEC Yield as of 11/30/2023 5.51%
Gross Expense Ratio 0.62%
Adjusted Expense Ratio 0.50%
PYLD
30-Day SEC Yield as of 11/30/2023 4.94-5.03%
Gross Expense Ratio 0.65%
Adjusted Expense Ratio 0.55%I don't find the 30 day SEC yield helpful. PIMIX: stably delivers 0.055 / month + 6.2% yld at current price PYLD: seems to vary monthly, but if it continues at the most recent 0.11 / mo it would yield 4.96% at NAV (currently trading at a slight premium. A total return chart show no meaningful difference between them. So on balance PIMIX seems the better choice, if you have access to it.
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Post by richardsok on Dec 22, 2023 15:41:54 GMT
I recently started dipping into (and occasionally out of) TLT. Any thoughts on that theme? Yeah. I remember fiddling with TLT & TBT a year or so ago. I did OK with it, but I found my progress inconsistent and stressful. My take: one has to watch his position every day and trade immediately on any change in technical signals. You absolutely ( well anyway I absolutely) cannot trade them on opinions or news. Hewing close to indicators is mandatory. Also I seemed to conclude I had to make my first buy the entire position. No following up and adding more if I was correct b/c the trend could change at any moment, it seemed, and my subsequent late buy would always be a loser. I used the three-month stockcharts layout using a relatively quick 2 x 14 day moving averages, crossovers being trade signals. Now that I look at it, I think I now prefer thinkorswim's one-month chart with the PPS indicator were I to dabble again. The Heikin-Ashi Smoothed and MACD are probably too slow. Looking just now, TLT seems to have found resistance. If I were trading it, I'd take profits right here and watch for possible reversal into TBT..... but don't heed a word I wrote. Good luck with it. |
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Post by acksurf on Dec 22, 2023 15:50:01 GMT
Note - based on this, I'm sticking with PIMIX. PIMIX
30-Day SEC Yield as of 11/30/2023 5.51%
Gross Expense Ratio 0.62%
Adjusted Expense Ratio 0.50%
PYLD
30-Day SEC Yield as of 11/30/2023 4.94-5.03%
Gross Expense Ratio 0.65%
Adjusted Expense Ratio 0.55%I would too but don't have access to PIMIX |
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kent
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Post by kent on Dec 22, 2023 16:11:19 GMT
It's time to extend maturities. I have stopped my T-Bill rolls. Options may be m-mkt funds (they will act with some lag, so may be slow to respond to any rate declines), ultra-ST bond funds ( USFR, ICSH), core-plus ( FTBFX or ETF cousin FBND), multisector ( PIMIX or ETF cousin PYLD). VWEAX is HY by name, may be core-plus by action. Many other choices exist in these categories. I do have PYLD but that is in part that is simulating PRWCX with TCAF + PYLD. , What Percentage are you using TCAF and PYLD to mimic PRWCX. Thanks |
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Post by yogibearbull on Dec 22, 2023 16:20:05 GMT
kent , my replacement for PRWCX is tentatively 62% TCAF + 20% PYLD + 18% USFR. Basically, mixing Giroux's value TCAF, Ivascyn's/Murata's multisector PYLD and some "cash" to control volatility. There is no history beyond a few months, so I will evaluate in future and tinker along the way.
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Post by racqueteer on Dec 22, 2023 18:45:17 GMT
I recently started dipping into (and occasionally out of) TLT. Any thoughts on that theme? Yeah. I remember fiddling with TLT & TBT a year or so ago. I did OK with it, but I found my progress inconsistent and stressful. My take: one has to watch his position every day and trade immediately on any change in technical signals. You absolutely ( well anyway I absolutely) cannot trade them on opinions or news. Hewing close to indicators is mandatory. Also I seemed to conclude I had to make my first buy the entire position. No following up and adding more if I was correct b/c the trend could change at any moment, it seemed, and my subsequent late buy would always be a loser. I used the three-month stockcharts layout using a relatively quick 2 x 14 day moving averages, crossovers being trade signals. Now that I look at it, I think I now prefer thinkorswim's one-month chart with the PPS indicator were I to dabble again. The Heikin-Ashi Smoothed and MACD are probably too slow. Looking just now, TLT seems to have found resistance. If I were trading it, I'd take profits right here and watch for possible reversal into TBT..... but don't heed a word I wrote. Good luck with it. Appreciate the response from both you and steadyeddie. I tend to agree that the chart may have plateaued here. The anticipation of rate drops had a salutary effect, but that anticipation may have reached its conclusion.  We now maybe need to wait until we actually get a cut... |
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Post by Norbert on Dec 22, 2023 18:59:02 GMT
kent , my replacement for PRWCX is tentatively 62% TCAF + 20% PYLD + 18% USFR. Basically, mixing Giroux's value TCAF, Ivascyn's/Murata's multisector PYLD and some "cash" to control volatility. There is no history beyond a few months, so I will evaluate in future and tinker along the way. What do you think of mimicking PRWCX with PRCFX + TCAF? If memory serves, PRCFX has asset class flexibility like PRWCX; up to 50% stocks I think. |
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Post by yogibearbull on Dec 22, 2023 19:58:52 GMT
Well, PRCFX is more recent than my related postings. And for that, my mix is TCAF 38% + PYLD 30% + 32% USFR. Of course, PRCFX & TCAF mix can work too. Posters have also suggested PRCWX (closed) & PRCFX (open), like W&W, but that doesn't work for many.
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Post by Capital on Dec 22, 2023 22:42:35 GMT
I moved some of the funds I had in T-Bills into BBB paper at last maturities.
On 11/17/2023 I bought some Prospect Capital 3.364% bonds at 88.145 yield to maturity 7.994%.
We can't get that yield at the present. Granted I did not buy a large position; but, it did increase my bond portfolio substantially.
As I have more maturities in T-Bills I may dabble in these lower investment grade areas again.
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Post by Chahta on Dec 23, 2023 12:05:15 GMT
yogibearbull said “It's time to extend maturities.” If so is it time to use core/core plus? Maybe DODIX and/or PTIAX? They both have had an amazing year (7+%) considering how despised bond funds have been.
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Post by chang on Dec 23, 2023 12:39:35 GMT
Just wondering if FBND has any advantage over FTBFX in a taxable account? ETFs are supposedly more tax efficient.
Normally I would opt for the OEF.
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Post by mnfish on Dec 23, 2023 12:57:48 GMT
Just wondering if FBND has any advantage over FTBFX in a taxable account? ETFs are supposedly more tax efficient. Normally I would opt for the OEF. FTBFX Capital Gains History - from fidelity.com Date Per Share Amount Reinvestment Price 12/03/2021 $0.005 $11.14 10/09/2020 $0.306 $11.18 10/11/2019 $0.01 $10.89 10/13/2017 $0.025 $10.71 |
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Post by yogibearbull on Dec 23, 2023 13:40:23 GMT
Small differences between cousins FTBFX and FBND should be ignored.
They are cousins, so not identical in portfolio or strategies.
Reinvesting for ETFs in chart services is different from what is actually possible. Chart services may reinvest on the ex-div dates for BOTH OEFs (OK & possible) and ETFs (convenient, but not possible). If you have turned on reinvestments for ETFs, those are actually handled in one of the two following ways - depends on the ETF sponsor and the brokerage.
1. If the brokerage has a deal with the ETF sponsor, then, you may get a small discount on reinvestments, and reinvestments may be earlier.
2. More common is for the broker to handle this all by itself - it pools all reinvestment orders a few days AFTER the pay-date (that may be several days after the ex-div date) and executes a large market-order for its reinvesting clients.
So, don't worry about +/- 1% differences over time between OEF and ETF cousins. Other reasons such tax-efficiency, trading flexibility, etc may be more important.
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Post by catdog on Dec 23, 2023 23:55:53 GMT
ftbfx/fbnd comparison shows .09 er less for FBND. .45 vs .36. Still not a big deal unless holding a very large position.
Catdog
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Post by chang on Dec 24, 2023 7:53:27 GMT
catdog Actually FTBFX has slightly outperformed FBND since the latter’s inception almost 10 years ago. After doing some digging, I found that the funds are run in a similar style, but there are some portfolio differences - see below. FBND is not a share class (a la Vanguard), which I mistakenly thought at first.
"FBND launched in October 2014, endeavoring to replicate the success of its mutual fund predecessor, Fidelity Total Bond FTBFX, which incepted in October 2002.
The strategy's foundation consists of U.S. Treasuries, investment-grade corporate credit, and agency mortgages, but the allocation to each of these sectors varies depending upon the team's assessment of relative valuations across a broad opportunity set that also includes high-yield credit, REITs, and emerging-markets debt.
The strategy can hold up to 20% in below investment-grade fare, but unlike its mutual fund sibling, the ETF's higher liquidity standard means that it avoids securities that might complicate that profile, such as high-yield commercial mortgage-backed securities, collateralized mortgage obligations, or collateralized loan obligations.
From its inception through April 2021, FBND gained 4.55% annually, outpacing the Retail share class of its predecessor mutual fund (FTBFX) by 5 basis points annually. This can be largely attributed to the ETF’s fee advantage. FBND’s annual fee is 9 basis points lower than the FTBX share class. That said, its after-tax performance has lagged, largely because FBND made a significant taxable capital gains distribution in 2020."
www.morningstar.com/etfs/examining-active-bond-etfs-potential
M* claims that FBND's return exceeded FTBFX from inception, but their own chart suggests otherwise. Ironic that the ETF (FBND) has been LESS tax efficient than the OEF!
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We now maybe need to wait until we actually get a cut...
