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Well that gave me a good laugh. I was going to comment on the writer's criteria, until I got to the bottom line:
So, I have just used the Learn Bonds 8 Steps to choosing a core bond fund to choose my fund:
The Loomis Sayles Investment Grade Bond A LW LIGRX.lw
*.lw funds are M* designations for how funds would rate if you could buy them without a load (e.g. in a 401K). They're not available for direct purchase.
Apparently, Loomis is giving this fund much of the same flexibility of its more famous sibling LSBDX. As of February 2012, it can now hold up to 10% of assets in equities. It can hold up to 10% in high yield bonds and 20% in non-U.S.-dollar currency exposure (ex-Canadian dollar). It seems to have a lot of additional tools now to deal with rising interest rates, if/when they come. When I look at its performance pattern, it again has some of that LSBDX "streaky" flavor--generally leads its peers in performance, but periodically can be at the bottom of its peers forcing you to have faith in its rebound performance.
In short, this is not your father's core bond fund, and quite likely not what the writer is trying to identify.
For most of the article, I thought the author's methodology and analysis were pretty good. It's probably a little too basic for the folks on this board, but (for most of the article) seemed like a good guide nonetheless.
Then I got to Step 8 and it was like somebody else walked in and picked a fund at random. It's pretty clear that whatever the Morningstar style box says, PTTDX and MWTRX are far better choices if you want to minimize risk. LIGRX (like LSBRX) had a big fall in 2008 although it did eventually recover.
Also despite Morningstar's lack of info on PTTDX, I think the author might not have dismissed it so quickly considering that he does seem to think bigger asset size is better, and this is basically the biggest fund on Earth.
I didn't even catch the *.lw issue that msf pointed out, but that just made the conclusion even more ridiculous.
Comments
Here's a long thread from M* that's asking whether this is a milder form of Loomis Sayles Bond fund (LSBDX): http://socialize.morningstar.com/NewSocialize/forums/p/307580/3266993.aspx
A pertinent excerpt:In short, this is not your father's core bond fund, and quite likely not what the writer is trying to identify.
Then I got to Step 8 and it was like somebody else walked in and picked a fund at random. It's pretty clear that whatever the Morningstar style box says, PTTDX and MWTRX are far better choices if you want to minimize risk. LIGRX (like LSBRX) had a big fall in 2008 although it did eventually recover.
Also despite Morningstar's lack of info on PTTDX, I think the author might not have dismissed it so quickly considering that he does seem to think bigger asset size is better, and this is basically the biggest fund on Earth.
I didn't even catch the *.lw issue that msf pointed out, but that just made the conclusion even more ridiculous.