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PIMIX / PONDX Lost their groove....managers or where invested.......???
.......PIMIX / PONDX Lost their groove....managers or where invested?
This possibility was discussed here last fall. Would the shuffle of management cause problems with operating these funds. Or are they invested in an area "out of favor" with current bond trends?
I do believe this house will remove PIMIX from our holdings, this week.
Opinions of others holding either of these funds ???
I don't own either of these and own little in the way of bonds, but you're dealing with a manager who is probably one of the most respected people left at Pimco. The fund has not had a good YTD, but 1, 3, 5 year are very good.
You can sell if you like, but 1) seems kinda quick and 2) if you are selling that I'd guess you're leaving Pimco from the standpoint of not sure what else is an appealing replacement there.
PIMIX dropped 3% between Nov 27 and Dec 17 last year, bumped up about 1.5% and remains sideways. And yes, this has been an exceptional bond fund for the past several years of our holding. The fund is 1, 1 and 7 ranking over the past five years and has almost doubled the average return of all M* rated, multisector bond funds.
Something has changed their previous pattern.
We also sold all of LSBDX the first week of January, our 2nd largest bond holding at the time.
This comes from a house that has "overstayed" the bond rally way past what most would have considered to be prudent investing in this sector. Every year for the past 5 years we have been issued warnings about the death of bonds. We also sold our HY bonds, early last fall.
We're 50% equity right now. Keeping in mind that our investments are all post-retirement directed.
The major consideration, as with all sells, is where the money will travel next.
Hey Catch, from M* charts and Yahoo price data, it looks like those pretty mild capital losses at PIMIX go back ~ 7 months.
One of the eye-catching features of the portfolio lately has been the lowered duration of the fund, down below 3 now, which they've pulled off by going negative duration on U.S. government debt. I think, without doing month-by month reviews of the portfolio commentary, that the negative duration position and some of the EM holdings (Russia, Brazil) are what have had the most to do with the capital losses. They're also vulnerable to credit risk on their mortgages, as they no longer hold much if anything in gov't mortgages. (Current breakdown is 2% government and 45% private.)
I wouldn't think the reorganization per se would have had a lot of effect on PIMIX, but they have been advertising themselves heavily as THE place to go for income, so I kinda wonder if there's been a subtle shift in how much they care about maintaining NAV.
Fwiw, I cut my formerly large position in half during Q4 '14, but holding there.
PONDX a great fund for the conservative investor. As a not so conservative investor this fund lost its allure in the spring of 2013 and have never ventured back. Without checking I assume AUM have soared the past many years making it not as nimble.
Thank you for your thoughts with this. I have digging around, too. We know these periods of cycles exist within many funds. Yes, the end of August, 2014 found the fund starting to move sideways and then bang in November. We're trying to determine if a trend is in place with this. I have the highest regards for the managers, among the 1,000's of bond fund managers.
i think what hurt them was a general backup in non investment grade spreads (HY, MBS and EM) since summer, and a rally in the long term treasury -- they are hedged (i.e. short long term bond). if your other fixed income funds have duration, this one has very little and will be more appropriate for the rising rates (check today's CPI reading!). i assure you that the PMs didn't swallow a dumb pill.
actually, i just looked up their commentary and it's pretty comprehensive (is not relevant for momentum followers here of course). Here
Here's a bond related story. Understanding bonds has been my biggest investment challenge. Much of it seems counter-intuitive and layered with all kinds of investment vehicles.
Tom McClellan published this chart and article today regarding the topic of the Fed fund rate.
Fedpoints: "Fedpoints Fedpoints is a reference series explaining the structure and functions of the Federal Reserve System and the economic concepts relevant to its work."
this is all great, but do remember that the Fed only controls the fed funds rate (an overnight borrowing cost), the longer rates are controlled by market participants.
Here's a bond related story. Understanding bonds has been my biggest investment challenge. Much of it seems counter-intuitive and layered with all kinds of investment vehicles.
Tom McClellan published this chart and article today regarding the topic of the Fed fund rate.
Fedpoints: "Fedpoints Fedpoints is a reference series explaining the structure and functions of the Federal Reserve System and the economic concepts relevant to its work."
This conversation must have put the magic into the funds. They both gained a full 20% of their YTD return, with today's return. Oh, well; such is the mystery of life.
Here's a possibly revealing Pimco tidbit, which may or may not be a firm-wide view also affecting PIMIX: I've been reading up on PLRIX, their diversified long-duration bond fund, and in the latest (January) monthly commentary, they cite the fund's positioning for long-end steepening as a detractor to performance.
If it is a firm-wide view that the persistent flattening trend is (over?)due to reverse, and they're so sure of it that they're positioning to lose $ if it doesn't, that of course puts them at odds with other views.
i wouldn't go that far. he capitalized on non-agency mortgages coming out of the credit crisis, which a few others did with a similar success. that trade has mostly run out. he hedges interest rates - which many do as well. as the rest of the mortgages pay down, he'll have a reinvestment decision to make and will have to make more winning than losing ones in order to stay in the game.
I follow about 50 open end bond funds of all stripes and colors and the only green today were PONDX and ANGLX - the latter having a banner year and with almost half in Non agency MBS.
PONDX was up .08% today and has been up 0.9% over the past month. It may be too soon to worry very much about how the fund is being managed.
I don't know about "worry," Davfor, but it's probably worth understanding WHY it was up today.
PIMIX and AHLPX were the only green on the screen for me today, but almost all the managed funds in the portfolio were down quite a bit less than the indexes.
Well, I know that it makes little sense, but I have to compare my mess portfolio to something, so I arbitrarily use the 500, striving for reduced volatility both up and down. Seemed to work OK today: 500 down 1.4%, our stuff down 0.8%. Solid red today, except for RPHYX, which stayed even. Good thing too, as there's a lot of cash stashed there.
Comments
You can sell if you like, but 1) seems kinda quick and 2) if you are selling that I'd guess you're leaving Pimco from the standpoint of not sure what else is an appealing replacement there.
PIMIX dropped 3% between Nov 27 and Dec 17 last year, bumped up about 1.5% and remains sideways. And yes, this has been an exceptional bond fund for the past several years of our holding. The fund is 1, 1 and 7 ranking over the past five years and has almost doubled the average return of all M* rated, multisector bond funds.
Something has changed their previous pattern.
We also sold all of LSBDX the first week of January, our 2nd largest bond holding at the time.
This comes from a house that has "overstayed" the bond rally way past what most would have considered to be prudent investing in this sector. Every year for the past 5 years we have been issued warnings about the death of bonds. We also sold our HY bonds, early last fall.
We're 50% equity right now. Keeping in mind that our investments are all post-retirement directed.
The major consideration, as with all sells, is where the money will travel next.
Thank you, scott.
Regards,
Catch
One of the eye-catching features of the portfolio lately has been the lowered duration of the fund, down below 3 now, which they've pulled off by going negative duration on U.S. government debt. I think, without doing month-by month reviews of the portfolio commentary, that the negative duration position and some of the EM holdings (Russia, Brazil) are what have had the most to do with the capital losses. They're also vulnerable to credit risk on their mortgages, as they no longer hold much if anything in gov't mortgages. (Current breakdown is 2% government and 45% private.)
I wouldn't think the reorganization per se would have had a lot of effect on PIMIX, but they have been advertising themselves heavily as THE place to go for income, so I kinda wonder if there's been a subtle shift in how much they care about maintaining NAV.
Fwiw, I cut my formerly large position in half during Q4 '14, but holding there.
Good luck, AJ
Thank you for your thoughts with this. I have digging around, too. We know these periods of cycles exist within many funds.
Yes, the end of August, 2014 found the fund starting to move sideways and then bang in November.
We're trying to determine if a trend is in place with this. I have the highest regards for the managers, among the 1,000's of bond fund managers.
Take care,
Catch
actually, i just looked up their commentary and it's pretty comprehensive (is not relevant for momentum followers here of course). Here
Tom McClellan published this chart and article today regarding the topic of the Fed fund rate.
2-year_t-note_shows_what_fomc_should_do/
Here's how the Fed describes it:
Federal Funds and Interest on Reserves
Fedpoints:
"Fedpoints Fedpoints is a reference series explaining the structure and functions of the Federal Reserve System and the economic concepts relevant to its work."
newyorkfed.org/aboutthefed/fedpoints.html
fa
This conversation must have put the magic into the funds. They both gained a full 20% of their YTD return, with today's return.
Oh, well; such is the mystery of life.
Catch
If it is a firm-wide view that the persistent flattening trend is (over?)due to reverse, and they're so sure of it that they're positioning to lose $ if it doesn't, that of course puts them at odds with other views.
PIMIX and AHLPX were the only green on the screen for me today, but almost all the managed funds in the portfolio were down quite a bit less than the indexes.
messportfolio to something, so I arbitrarily use the 500, striving for reduced volatility both up and down. Seemed to work OK today: 500 down 1.4%, our stuff down 0.8%. Solid red today, except for RPHYX, which stayed even. Good thing too, as there's a lot of cash stashed there.