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High expense ratios, and the "alphabet soup" of multiple share classes. Looks like you have the privilege of paying a sales load even if you make your own investment decisions. I'll pass on this
Question. I think alternative fund craze should be dying out. Did PIMCO really start a "me too" fund, and has PIMCO ever closed a fund because it didn't work out, or merge it away?
Question. I think alternative fund craze should be dying out. Did PIMCO really start a "me too" fund, and has PIMCO ever closed a fund because it didn't work out, or merge it away?
There are excellent examples of alternatives, but I'm not going to get into that whole debate this morning.
Pimco has not closed any of its equity funds, which don't have a long history. They've probably closed other funds in the past, but I have no idea.
Of the alternative strategies, managed futures/trend following is one thing that I don't think works particularly well at all in mutual fund format. I do not see why Pimco decided to go this route in terms of alternatives.
Speaking of alternatives, Pimco's L/S fund has done damn well.
I think the alt fund idea is still growing but the me too funds will suffer. If you have a known manager then it should sell well.
As far as Pimco goes maybe they grew too fast? There may be a time for them to go back to what they do best.
Pimco's idea of taking managers who have established themselves elsewhere was a really good one. However, it has not panned out that well. The former Mutual Discovery managers are doing iffy (not that I'd expect a home run from them, but given expectations), one of the former Thornburg Income managers has left (those two funds have done just okay) and the emerging markets fund has not done terribly well.
I do not like trend following/managed futures when it comes to the mutual fund format. If this was another example of Pimco pulling in a managed futures hedge fund that is converting to a mutual fund, maybe that would be better (still not worth interest), but it's not - it's a couple of directors and one of the former managers of the underwhelming Pimco Global Multi-Asset fund.
The one Pimco equity fund that has done exceptionally well after a bit of a sluggish start was the one with the least fanfare - the L/S fund, which was a former hedge fund. That fund - despite its concentrated nature and heavy cash holdings - did remarkably well last year.
I agree the new fund is something most won't understand but it has a fancy name. I also followed the Long-short fund but decided on a cheaper fund. That Pimco fund has done well.
I agree the new fund is something most won't understand but it has a fancy name. I also followed the Long-short fund but decided on a cheaper fund. That Pimco fund has done well.
I just think maybe the Pimco fund appeals to some advisors and that's probably it. I just don't see retail interest.
There are managed futures hedge funds that have exceptional records and have both the management and the technology.
However, they also have the flexibility to be highly nimble - and they get paid 2 and 20. You have some of these managed futures mutual funds that adjust around once a month (see RYMFX), which just continues to be whipped around by trying to adjust monthly to a market that is far more minute-to-minute and being frequently positioned wrong.
The giant managed futures hedge funds have massive amounts of research and tech.
"The scientists at Winton say one thing that sets them apart is the sheer amount of data they base their algorithms on. More historical information, they say, helps put price trends into context.
The company's London offices display charts tracking the prices of commodities going back hundreds of years, old maps and bank notes and even a dividend cheque from the 18th-century South Sea Company.
Winton sends researchers to libraries and archives across the world to find numbers held in books and on microfilms. It has found barley and sesame prices from ancient Babylon, and English wheat prices going back to 1209.
It now employs more than 90 researchers, including extragalactic astrophysicists, computer scientists and climatologists. The company hired a meteorologist who had researched the "El Nino" phenomenon. The physics graduate - Winton wants to keep his name secret for fear a rival might poach him - works in London correlating weather data to crops such as corn, wheat and soybeans. That data can be used to forecast how prices might fluctuate with the weather.
While traders in commodities have long looked at weather statistics and forecasts, the attempt to computerize the process creates the basis of an industry."
That reuters article from a couple of years ago is titled "The algorithmic arms race" and while one can debate the merits of these funds, the idea is that you have exceptionally well-funded managers who are trying to go to the ends of the Earth for any little bit of data that will give them an advantage.
The managed futures mutual funds just cannot compete, both in terms of research/data and flexibility. Maybe the AQR one, to some degree, but even that is hampered by lack of flexibility.
The one Pimco equity fund that has done exceptionally well after a bit of a sluggish start was the one with the least fanfare - the L/S fund, which was a former hedge fund. That fund - despite its concentrated nature and heavy cash holdings - did remarkably well last year.
It's a great fund, and now the largest stock position I've got; but I'd point out that it's advertised as long-biased, and boy is it ... 82% long now, for a L-S fund, seems fairly aggressive. I'd say the stock box is the appropriate spot for it in a portfolio, rather than an alternatives box.
Comments
Pimco has not closed any of its equity funds, which don't have a long history. They've probably closed other funds in the past, but I have no idea.
Of the alternative strategies, managed futures/trend following is one thing that I don't think works particularly well at all in mutual fund format. I do not see why Pimco decided to go this route in terms of alternatives.
Speaking of alternatives, Pimco's L/S fund has done damn well.
As far as Pimco goes maybe they grew too fast? There may be a time for them to go back to what they do best.
I do not like trend following/managed futures when it comes to the mutual fund format. If this was another example of Pimco pulling in a managed futures hedge fund that is converting to a mutual fund, maybe that would be better (still not worth interest), but it's not - it's a couple of directors and one of the former managers of the underwhelming Pimco Global Multi-Asset fund.
The one Pimco equity fund that has done exceptionally well after a bit of a sluggish start was the one with the least fanfare - the L/S fund, which was a former hedge fund. That fund - despite its concentrated nature and heavy cash holdings - did remarkably well last year.
I agree the new fund is something most won't understand but it has a fancy name. I also followed the Long-short fund but decided on a cheaper fund. That Pimco fund has done well.
There are managed futures hedge funds that have exceptional records and have both the management and the technology.
However, they also have the flexibility to be highly nimble - and they get paid 2 and 20. You have some of these managed futures mutual funds that adjust around once a month (see RYMFX), which just continues to be whipped around by trying to adjust monthly to a market that is far more minute-to-minute and being frequently positioned wrong.
The giant managed futures hedge funds have massive amounts of research and tech.
"The scientists at Winton say one thing that sets them apart is the sheer amount of data they base their algorithms on. More historical information, they say, helps put price trends into context.
The company's London offices display charts tracking the prices of commodities going back hundreds of years, old maps and bank notes and even a dividend cheque from the 18th-century South Sea Company.
Winton sends researchers to libraries and archives across the world to find numbers held in books and on microfilms. It has found barley and sesame prices from ancient Babylon, and English wheat prices going back to 1209.
It now employs more than 90 researchers, including extragalactic astrophysicists, computer scientists and climatologists. The company hired a meteorologist who had researched the "El Nino" phenomenon. The physics graduate - Winton wants to keep his name secret for fear a rival might poach him - works in London correlating weather data to crops such as corn, wheat and soybeans. That data can be used to forecast how prices might fluctuate with the weather.
While traders in commodities have long looked at weather statistics and forecasts, the attempt to computerize the process creates the basis of an industry."
http://www.reuters.com/article/2012/05/21/us-trading-blackbox-idUSBRE84K07320120521
That reuters article from a couple of years ago is titled "The algorithmic arms race" and while one can debate the merits of these funds, the idea is that you have exceptionally well-funded managers who are trying to go to the ends of the Earth for any little bit of data that will give them an advantage.
The managed futures mutual funds just cannot compete, both in terms of research/data and flexibility. Maybe the AQR one, to some degree, but even that is hampered by lack of flexibility.