MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Question for the board - would you replace Pimco Total Return with its ETF bond fund (BOND)?

Sven
edited August 2012 in Fund Discussions
I have been considering replacing PTTRX with BOND. Although there are structural differences between PTTRX and BOND, i.e. no derivatives as hedging, the sheer size of PTTRX alone is disconcerting for sometime. BOND holds fewer bonds and they represent the "best ideas" of Bill Gross. Expense ratios are comparable and there is a slight premium to the NAV on BOND. I would like to hear feedback from the board. Thank you.

For disclosure, I have invested with PTTRX for over 20 years, principally through our 401(K) plans.

Comments

  • AndyJ
    edited August 2012
    I'm about 50-50 between BOND and PTTRX and have been thinking about going all BOND for the past 2-plus months. The reasons I haven't yet are the higher dividend yield of PTTRX and the fact that the performance gap has narrowed some in recent weeks. I may still do it, but I'm also thinking about reducing Gross's share of our portfolio and putting a little more in Pim Income, which would probably come from PTTRX for the reasons you cite.
  • Sven
    Reply to @AndyJ: Over the last several months I have been seeking alternatives to PTTRX: DoubleLine Total Return, DBTLX, Vanguard Wellesley, VWINX, T.Rowe Price Spectrum Income, RPSIX, and BOND. I am leaning toward DBTLX and BOND to replace PTTRX. I can live with lower yield, and if necessary I will increase high yield bond allocation.



  • scott
    Not an alternative to PTTRX, but I did start a small position in PUBDX (Pimco Unconstrained) the other day.
  • Sven
    Reply to @scott: Pimco Unconstrained is similar to Total Return in many aspects. The key difference is the much wider mandates allow in this fund. With much smaller asset than that of Total Return, Unconstrained can move easily from one sector to another. Another option is go negative in bond duration - not exactly sure how this is done. These are good tools to have when rates eventually go back up again. Given the state of economy, rates will likely to stay low for another year.
  • AndyJ
    edited August 2012
    Reply to @Sven: Just fyi, I'm in the process of making the switch - selling PTTRX, putting half the proceeds into BOND and the other half into a smaller existing position in PDIIX, Pimco Diversified Income.

    I already had filled-out positions in DBLTX and VWINX/VWIAX, two of the other funds you mentioned. When this switch is all done, Pimco will be ~ 20% of the portfolio, divided roughly equally between BOND, PIMIX, and PDIIX.
Sign In or Register to comment.