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The Lowdown On Adding Foreign Bonds To Your Portfolio
MAPOX & PRWCX = 51.7% of portf. (Both are balanced funds) DLFNX = 2.5% PRSNX = 11% PREMX = 14.3% (Not the entire portfolio.) *************************************** M* X-RAY shows 10% Cash 43% US stocks 8% foreign stocks 37% bonds of all sorts. .....EM bonds are flying high. "World bonds" pretty alright, too.
I won't be adding. What I will be adding to is a utility stock, to build quarterly divs. for current income in a taxable account. I have 8.5 years before RMDs kick-in on the IRA.
Hi Crash, looks like PRSNX has turned out to be a worthy fund.
Just charted it, DLFNX, and GBOAX (the last global oef I owned), and they have almost identical 3y returns, with DLFNX taking the steadier path to the result.
One who is smarter than me years ago, here at MFO, alerted me that the SEC number is the more reliable and accurate. So I have trusted that. Even though my government and its agencies have been lying to me for my whole life. I've come to expect it.
If the market rate for a 1 year bond is 1%, you might buy a bond at: - 100 with a 1% coupon (returning 100 in principal in a year), - 101 with a 2% coupon (returning 100 in principal in a year), or - 99 with zero coupon (returning 100 in principal in a year).
The current yield on these bonds are roughly 1%, 2%, and 0%. But all of them give you a 1% yield to maturity - you end the year with 1% more than you started.
That's the idea behind SEC yield - it does for a portfolio with various bonds what yield to maturity (actually yield to worst) does for a single bond. It's more accurate for what you actually earn over time, but doesn't tell you the amount of the next interest check.
@Crash - the SEC yield is a formula; if it's wrong, it's the fund company that used the formula for its fund that is lying. Regardless, you're right - it's a matter of trust.
Comments
DLFNX = 2.5%
PRSNX = 11%
PREMX = 14.3%
(Not the entire portfolio.)
***************************************
M* X-RAY shows
10% Cash
43% US stocks
8% foreign stocks
37% bonds of all sorts.
.....EM bonds are flying high.
"World bonds" pretty alright, too.
I won't be adding. What I will be adding to is a utility stock, to build quarterly divs. for current income in a taxable account. I have 8.5 years before RMDs kick-in on the IRA.
Just charted it, DLFNX, and GBOAX (the last global oef I owned), and they have almost identical 3y returns, with DLFNX taking the steadier path to the result.
http://finance.yahoo.com/q?s=PFORX
My computation is closer to Fidelity.
See also MFO discussion: Difference between TTM Yield and 30 day SEC yield:
http://www.mutualfundobserver.com/discuss/discussion/18413/difference-between-ttm-yield-and-30-day-sec-yield
Thanks - I think I like using the SEC 30 day yield, not the TTM.
If the market rate for a 1 year bond is 1%, you might buy a bond at:
- 100 with a 1% coupon (returning 100 in principal in a year),
- 101 with a 2% coupon (returning 100 in principal in a year), or
- 99 with zero coupon (returning 100 in principal in a year).
The current yield on these bonds are roughly 1%, 2%, and 0%. But all of them give you a 1% yield to maturity - you end the year with 1% more than you started.
That's the idea behind SEC yield - it does for a portfolio with various bonds what yield to maturity (actually yield to worst) does for a single bond. It's more accurate for what you actually earn over time, but doesn't tell you the amount of the next interest check.
@Crash - the SEC yield is a formula; if it's wrong, it's the fund company that used the formula for its fund that is lying. Regardless, you're right - it's a matter of trust.