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Thinking of taking the plunge on PIMCO All-Asset All-Authority...thoughts on this product?
Bought a small foothold of the "I" shares at TDA. Trade fee is $49.99. Not sure if Wellstrade (don't think you can get the "I" shares there) , Fido, or Schwab offer the same. Bought into it for the same reasons you mentioned.
You're getting a manager who is very intelligent and who has a very good long-term record. However, in the shorter term, he's going to call it as he sees it, and while the fund is never going to hit home runs, it may disappoint in the short-to-mid term. At this particular point in time and in the market, it is not a bad idea for those who want to dial-down risk. I've sold some of mine (which went to a foreign fund), but still am keeping a position, as I have a lot of respect for Arnott.
I got it when it first came out some years ago. Then sold.
Bought some again early this year.
You have to trust Arnott and his team and not mind tracking error, as it's not going to follow a particular index since he can invest in anything and also short. I think it's a great diversifier because of that, just don't follow it too closely cause it will make you crazy during certain quarters when he makes wrong bets. The good thing is that it looks as if he's always going to be heavily tilted towards bonds (with a large slug of high credit), so it's probably not going to go off the rails in any one year period.
I've looked at, and owned, a lot of hedge-type MF products, and his is the one I've been most happy with. And not have to worry about too much.
I would only consider purchasing the institutional class of this fund, PAUIX (0.98% ER), due to the excessively high expense ratio of PAUDX (1.38%) for a $10.4B AUM fund. This fund is best used as a hedge-fund equivalent position in one's portfolio, in my opinion. Shortly after the merger of Wellstrade with Wells Fargo, I purchased online an initial position in PAUIX for a $100 minimum in my WT retirement account. This fund is also available for $25K minimum in Vanguard accounts, and there is no minimum for this fund at TDA.
The only advice I'd have to offer is to be sure you know what you're getting. M* calls it a world allocation fund, but it's a somewhat different animal from most funds plunked into that category in that, as other posters are saying, it's really a bond-heavy hedge fund that rarely (maybe never) goes significantly long in stocks. (Therefore it could be smooth sailing for a while now with stock prices so high?)
While it's delivered good results over the longer term, it's probably good to remember that it didn't 'hedge' the 2008 crash as well as a basic diversified bond fund -- e.g., Pauix lost 7% in '08 while Pttrx gained 5%.
I'm DCAing into PAUDX in an small IRA account I have. I will have the entirety of this IRA in PAUDX and plan to hold on for dear life after that.
I think PAUDX mandate is the broadest possible and still keeping it a Mutual Fund. 20 years from now, methinks this will prove to be a incredibly brilliant or incredibly stupid idea.
I've invested in this fund for the past three years, but am now looking more seriously at Pimco Global Multi-Asset. If you graph it against Arnott's AAAA, it is quite similar, but M* portfolio analysis shows that they're following different methods (stock/bond/cash/alternative asset balances) even if performance is very similar. GMA is a bit more focused on larger cap stock, and has bested AAAA slightly each year over the past three years of its history. My guess is that they're both quite solid absolute return funds that have limited downside risk. Worth watching, especially when stocks are quite fully valued and QE2 is coming to an end.
Neither fund is intended as "absolute return" and do have mild risk involved. AA/AA can short; I believe Pimco MA has far out of the money S & P puts ("Armageddon insurance")
I'm seeing an ER of 1.38% on All Asset/AA; that does not seem particularly outrageous for a fund-of-funds.
What's the limit on ER for some posters? It would appear to be under 1.25% (under 1%?), which I think would be significantly limiting in terms of selection.
For those who can scrape together $25k, the institutional shares (Pauix) are open for bid'ness at Vanguard at 0.98% E.R. Lots of other Pimco funds are there for the same minimum,with similar reductions from the investor shares E.R.s.
These are not just funds of funds. Both are absolute return funds (see Morningstar analysis), i.e., they use a mix of short strategies, options, or other methods in order to limit potential downside risk. They can also use leverage. Absolute return doesn't mean that the funds can't go down, in fact, Global Multi-Asset only aims to insure that it won't every go down by more than 15%.
The fees are relatively high, but effectively you're hoping to get some insurance for your money, as well as some very smart guys making asset allocation decisions.
It is very difficult for one to tell whether these funds of funds do any better than one doing their own asset allocation with selected funds. It seems easier to have someone else do it but it comes at a high cost. Burt S.
Comments
Bought some again early this year.
You have to trust Arnott and his team and not mind tracking error, as it's not going to follow a particular index since he can invest in anything and also short. I think it's a great diversifier because of that, just don't follow it too closely cause it will make you crazy during certain quarters when he makes wrong bets. The good thing is that it looks as if he's always going to be heavily tilted towards bonds (with a large slug of high credit), so it's probably not going to go off the rails in any one year period.
I've looked at, and owned, a lot of hedge-type MF products, and his is the one I've been most happy with. And not have to worry about too much.
Marty
Kevin
While it's delivered good results over the longer term, it's probably good to remember that it didn't 'hedge' the 2008 crash as well as a basic diversified bond fund -- e.g., Pauix lost 7% in '08 while Pttrx gained 5%.
Burt S.
I think PAUDX mandate is the broadest possible and still keeping it a Mutual Fund. 20 years from now, methinks this will prove to be a incredibly brilliant or incredibly stupid idea.
Ginko
What's the limit on ER for some posters? It would appear to be under 1.25% (under 1%?), which I think would be significantly limiting in terms of selection.
The fees are relatively high, but effectively you're hoping to get some insurance for your money, as well as some very smart guys making asset allocation decisions.
Burt S.