Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
In searching for the ultimate Bond portfolio I became side tracked by a fund mentioned by Catch. the Vanguard fund Wellesley VWINX. This fund is 60% bonds and 20% equities. In doing long term comparisons it seems that no bond fund can compete with it with total return and yet its downside risk in bad markets is greater but not that much. Would appreciate some comments.
I think that Wellesley is a great fund, and will likely use it some time in the future when it fits my needs. But I think you're overstating the case a bit when you say no bond fund can compete with it in long term total return. (Also, its target stock/bond allocation is between 35/65 and 40/60 per prospectus; it is currently holding 38/57, with the most of the remainder in cash.)
Recognize that much of its advantage comes from Vanguard's low costs (which apply just as much to its actively managed funds as to its index funds). Pure bond funds (excluding high yield, inflation adjusted, global, etc.) with 5 and 10 year total return records at least as good include Artio Total Return (BJBGX, JBGIX) - a fund Bob C has mentioned, Columbia Corporate Income (SRINX), Federated Bond (FDBAX - available NTF at Schwab), Loomis Sayles Core Plus (NERYX) and Investment Grade (LSIIX), Managers (MGFIX) - managed by Dan Fuss as a more straightforward fund than Loomis Sayles Bond (which also beats Wellesley), Met West Total Return (MWTIX), PIMCO Total Return (PRRIX), Scout Core Plus (SCPZX), TCW Core (TGCFX, TGFNX) and Total Return (TGLMX, TGMNX), and Western Asset Core Plus (WACPX) - appears to be NTF with low min in IRA at WellsTrade.
There's a common thread here - these funds generally are a bit broader than the typical intermediate bond fund. Core Plus funds try to cover the whole US market, not just investment grade (much as a total stock fund tries to cover the whole US equity market, and not just the S&P 500); others have a smattering of foreign bonds, but not enough to kick them into multisector or world bond categories. And they're likely all very good funds (I'm familiar with most, but not all, of the ones listed).
If you like bond funds that dabble in stocks, you might also look at TRP Spectrum Income (RPSIX). This fund has also beaten Wellesley over five and ten years, and keeps around 15% in equities.
Thanks for the the savy comments . I note that you did not include Dodge and Cox DODIX. Do you have any comment or thoughts on this particular fund? Burt
Reply to @msf: Interesting that you bring up Rpsix in connection with Vwinx, msf. Rpsix is kind of a clandestine conservative allocation fund; if you count the high-yield and EM bonds toward an 'equity-correlated' percentage of the fund, it has roughly the same higher risk: lower risk profile as Vwinx. As you say, it's not done as well as Vwinx recently, but over 5 and 10 years, it's ahead.
On the M* charts, I switched the benchmark for Rpsix to conservative allocation, and putting in Vwinx and a couple of other CA funds for comparison, it looks like it would rank among the CA funds as ~ 5* for > 3 years and ~ 4* for < 3 years (rather than 3* among MS bond funds).
Imho, if the stock allocation were put into, say, Prwcx instead of Prfdx, it would be even better still.
MWTIX appears to be available at WellsTrade with a $50 min, at least for IRAs. Similarly, when I enter MSWTIX into a Fidelity IRA, it says there is a $500 min. Schwab's system appears to enforce the $1M min for IRAs.
You should also take a look at BERIX (Berwyn Income) which is a conservative allocation fund similar to Wellesley in some ways (about 27% in stocks). Very steady, higher returns and comparable volatility.
Comments
Recognize that much of its advantage comes from Vanguard's low costs (which apply just as much to its actively managed funds as to its index funds). Pure bond funds (excluding high yield, inflation adjusted, global, etc.) with 5 and 10 year total return records at least as good include Artio Total Return (BJBGX, JBGIX) - a fund Bob C has mentioned, Columbia Corporate Income (SRINX), Federated Bond (FDBAX - available NTF at Schwab), Loomis Sayles Core Plus (NERYX) and Investment Grade (LSIIX), Managers (MGFIX) - managed by Dan Fuss as a more straightforward fund than Loomis Sayles Bond (which also beats Wellesley), Met West Total Return (MWTIX), PIMCO Total Return (PRRIX), Scout Core Plus (SCPZX), TCW Core (TGCFX, TGFNX) and Total Return (TGLMX, TGMNX), and Western Asset Core Plus (WACPX) - appears to be NTF with low min in IRA at WellsTrade.
There's a common thread here - these funds generally are a bit broader than the typical intermediate bond fund. Core Plus funds try to cover the whole US market, not just investment grade (much as a total stock fund tries to cover the whole US equity market, and not just the S&P 500); others have a smattering of foreign bonds, but not enough to kick them into multisector or world bond categories. And they're likely all very good funds (I'm familiar with most, but not all, of the ones listed).
If you like bond funds that dabble in stocks, you might also look at TRP Spectrum Income (RPSIX). This fund has also beaten Wellesley over five and ten years, and keeps around 15% in equities.
Thanks for the the savy comments . I note that you did not include Dodge and Cox DODIX.
Do you have any comment or thoughts on this particular fund?
Burt
On the M* charts, I switched the benchmark for Rpsix to conservative allocation, and putting in Vwinx and a couple of other CA funds for comparison, it looks like it would rank among the CA funds as ~ 5* for > 3 years and ~ 4* for < 3 years (rather than 3* among MS bond funds).
Imho, if the stock allocation were put into, say, Prwcx instead of Prfdx, it would be even better still.
Burt