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PSLDX, DSENX

Any chance these funds will be profiled in the coming months? Maybe Sam Lee would have some insight to share on these.

I think PSLDX was referenced before on the boards, it's compelling just because of the amount of outperformance it's exhibited and seems to have a larger correlation to long duration bonds, hence the name of the fund. Could be somewhat of a diversifier for an all stock portfolio, but overall just too much total return not to be at least worth a look. The institutional shares minimum is waved a TD and Scottrade.

DSENX seems to be doing fine and is known on this board, but the performance and strategy have been impressive in the short term with the CAPE etn and the mutual fund a year later along with the Shiller's backtest (aren't the backtests always good though).

Comments

  • One PSLDX minim appears to be $100k while M* says $1M. Other than that...
  • The PIMCO prospectus gives the min as $1M. Brokerages generally have some flexibility in setting their own minimums. Fidelity may require $100K, but Scottrade requires just $100.
  • PIMCO has a number of "stocksPLUS", some of which do great, others not so well. I never quite understood the "special sauce" in many of these funds.
  • edited July 2016
    @msf:
    >>The PIMCO prospectus gives the min as $1M. Brokerages generally have some flexibility in setting their own minimums.


    Correct. Never seen this degree of flexibility.

    Listed but unavail (to my accounts anyway) at ML.

    Exact tracking w DSENX with remarkable performance.
  • TD Ameritrade offers Institutional shares of PIMCO funds without any minimum (but with a transaction fee). Vanguard offer them with a $25,000 minimum (also transaction fee).
  • TIBIX - $2.5M minimum (prospectus), $2.5K in a Fidelity IRA. Not quite the 10,000:1 ratio (prospectus vs. brokerage min) that one finds with PIMCO, but 1,000:1 is still pretty darned flexible.

    One of the weaker aspects of Merrill Edge is that if it offers a share class NTF, it usually doesn't make the cheaper institutional shares available (with TF).

    An exception is MWTIX. That share class carries a min of $3M. It used to be available at many brokerages for a min of $50K. Not small, but potentially reachable for some investors, especially as it can serve as a core fund. Now, Merrill is the only place I've found that still has this "low" min.
  • edited July 2016
    PSLDX's performance is amazing when compared to the S&P 500. But I think your intuition is correct and its outperformance is mostly attributable to long-term bonds.

    I looked at PSLDX's fund page here: https://www.pimco.com/investments/mutual-funds/stocksplus-long-duration-fund/inst

    An interesting point is that its "secondary benchmark" is the following:
    S&P 500 Index + Barclays Long-Term Government/Credit Index - 3 Month LIBOR: The benchmark is a blend constructed by adding the returns of the S&P 500 Index to the Barclays Long-Term Government/Credit Index and subtracting 3-Month LIBOR.
    In other words, PSLDX return is basically S&P 500 + Long-term bonds. You can think of this as taking your investment amount, leveraging it 2x, and then putting half of it into an S&P 500 index and the other half into a long-term bond fund. The "3-month LIBOR" in the benchmark would represent the interest rate you pay for the leverage -- interest rates have been low so this cost is basically negligible.

    If you scroll down to calendar year returns, what you see is that PSLDX's performance does track the secondary benchmark pretty closely every year, i.e. what you are getting is S&P 500 + long-term bond return. Presumably PIMCO can borrow money cheaper than you can -- otherwise you could achieve the same thing by taking out a second mortgage and putting it in Vanguard Long-Term Government Bond Index Fund.

    Leverage is often considered very risky, but I suppose the idea is that stocks and long-term bonds should not both decline at the same time. That would be pretty disastrous.

  • edited July 2016
    @claimui

    I would like to read your clear words on DSENX.
  • PSLDX is $100,000 min at Schwab, but you could have the transaction fee deducted from that already low entry point! I don't travel in those circles. Glad to go with DSENX.
  • As I commented above, you can get PSLDX for just $100 at Scottrade. But then the transaction fee ($17) would constitute 14.5% of the total committed ($117). And people say 5.75% front end loads are expensive!

    Regarding Schwab - I tried a test trade for $100K and asked for the $76 transaction fee to be deducted from this. It wouldn't let the trade go through, because the net amount to invest didn't meet the $100K min. A test trade for $100K plus $76 transaction fee was allowed to go through. Well, except for the fact that Schwab recognized I didn't have that kind of cash in the account:-(
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