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Pimco Dividend & Income Builder (PQIDX)

edited September 2012 in Fund Discussions
would appreciate all comments on pqidx, i am considering buying it.


  • I think the managers are skilled, although I thought performance initially was a little disappointing - it's since improved. I'm positive on it. The only one of Pimco's new stock funds I'm negative on so far is the Emerging Markets fund (and, by extension, the Emerging Multi-Asset fund.)
  • edited September 2012
    PQIDX (Pimco Dividend & Income Builder) has done pretty decent so far and it's only been out since around late last year to beginning of this year.

    The results are pretty short term but YTD it's ahead of TIBIX and Tweedy Browne Worldwide Hi Dividend Yield fund so far. Looks good so far.

  • I like and own PQIIX, the lower cost institutional class available for low minimums at TDA and Scottrade. Although this fund is very young, the managers are rock solid, and are responsible for the great long-term record of TIBIX. As compared with TIBIX, PQIIX has a much lower AUM ($66M vs. $11B), higher exposure to EM equities (19% vs. 8%), slightly lower net expense ratio (0.83% vs. 0.87%), and a lower distributed yield (4.5% vs. 6.6%).

  • How do you guys view it in comparison to PTHDX, the equity pathfinder fund ?
    I own the latter and trying to understand which managers are better for long term.:-)

    Appreciate your inputs.

  • BWG
    edited September 2012
    Any thoughts on how the new First Eagle Global Income Builder Fund (FEBIX) stacks up against PQIIX /PQIDX and TIBIX?

    Thanks in advance.

  • Reply to @mrc70:

    As you know, PQIIX and PTHDX are in different spaces, as the first is an income-builder and committed to a growing stream of distributions, and the latter is a global equity fund focused on total returns. They both try to provide downside protection.

    The managers of PTHDX -- Anne Gudefin and Charles Lahr -- had a decent, but not a stellar record at their former fund, MDISX from 2005 to 2009. Since leaving Mutual Series, MDISX has outperformed PTHDX over all periods and since inception of PTHDX. In my opinion, the performance of PTHDX has been mediocre and underwhelming so far.

    As for PQIIX, the lead manager -- Brad Kinkelaar -- had a great record when he managed TIBIX from 2002 to 2009, despite a rocky 2008. As the TIBIX manager, he outperformed MDISX during the period that Gudefin and Lahr were running the fund. Furthermore, PQIIX has outperformed PTHDX over all time periods and since inception of PQIIX on 12/14/2011.

    Bottom line: If you need an income-builder, then PQIIX would be the better fund. If you need total return, then so far, I would have to give the edge also to PQIIX.


  • Reply to @BWG:

    PQIIX and TIBIX are definitely in the same space as they are committed to a growing income stream which is important for retirees. As for FEBIX, it is committed to a "sustainable income stream," which is quite different.

    Also, FEBIX has two FI managers (Meigs and Slein) with a good track record at FEHIX, but the two equity managers (Caputo and Hordon) were previously analysts and have no track record as equity managers. I would watch FEBIX, but definitely not be an early buyer.

  • TIBIX has a ver long, proven record. They don't do anything flashy with their cash, like the derivatives and other enhancing techniques that many PIMCO funds (including PQIIX).
    Yes, the managers of PQIIX did come from Thornburg, but I would not say they were the managers of TIBIX when they were there. They were part of the management TEAM, which was headed by Brian McMahon, who really helped start the fund and still is the lead manager. No question Kinkelaar and Remily are talented, though, and what they learned from Bill Fries and Brian McMahon had to be a tremendous plus when they moved to PIMCO. My view is that Thornburg will probably achieve a higher dividend yield (about 6.3% this year vs. PIMCO at 3-4%) because they do not use derivatives and maintain a pretty low cash position, but PIMCO might have an edge on total return if their "enhancing" strategies play out. Both probably good long-term options, both good management teams. For me, having a fund based in Sata Fe, where there is no noise and little influence from the major financial centers is a good thing. And it is also good to have an option where the PIMCO/Goss juice has not been drunk.
  • edited September 2012
    Reply to @BobC:

    Yes but Kinkelaar was at Thornburg for 9 years and helped build or initiate the TIBIX fund. He was equal co-manager of the fund with Brian McMahon. I'm pretty sure from what I had read that Kinkelaar wasn't just tacked on as a co-manager but that Kinkelaar was in fact a co-founder of the TIBIX fund and helping to develop it before inception.

    In fact, while managing TIBIX --- Kinkelaar also took the lead in most of the media discussions.

    The reason why PQIIX has a lower yield is because they're more cautious on higher yielding stocks. Don't forget that over the long run, dividend growth + dividend yield has provided better performance than high yield alone. As an example, TIBIX has higher Telecom and Utilities allocation than PQIIX --- there's higher yields in these 2 sectors there but smaller dividend growth potential in those sectors now. The Utilities sector is slated for flat/zero dividend growth.

    In fact, TIBIX has 24.9% allocated to the Telecom sector -- significantly much much higher allocation than PQIIX.

    Furthermore, the majority of the bonds in TIBIX are BBB and lower.

    PQIIX is a little more careful & cautious with balance sheet and quality and again that's why you're seeing a difference in yields between the 2 funds but don't forget the invisible number that not everyone sees - dividend growth.

  • I heard all of your views on PQIDX and also read the comments of Kevin on PQIDX vs PTHDX. I understand that these two have different mandates/goals but ultimately total return counts for me, who is relatively young investor. Keeping the track record of these managers, what would you folks recommend between these two funds ?

  • Mrc, I am in your position with total return being a priority, of course with some downside protection which all of these funds provide. From this mix, I selected PQIIX due to the proven managers, much lower AUM, higher exposure to EM, and the access to the "PIMCO/Gross Juice," which I view as an asset. That juice continues to perform -- just look at the performance of PIMIX, PIGIX, BOND, and even the bloated ($272B AUM) PTTRX. However, I do think that the FI portion of one's portfolio should be diversified among managers if actively managed bond funds are used.

  • Reply to @kevindow: Are the data you posted found in M*? The difference in EM exposure reflects different viewpoints with respect to risk & return between Pimco and Thornburg.
  • Reply to @Sven:

    The EM data was obtained from M*, although PQIIX's EM equity allocation is currently 17% as shown HERE. With such different allocations to EM, obviously they have different viewpoints about the value of EM equities.
  • Reply to @kevindow: The EM allocation is decreasing from the previous month. Also over 10% derivates are used in the cash position. Going foward these two funds should not track each other as the portfolio construction are distinctly different. Question is which one will do better in market corrections? Market continues to go higher even though the issues have not been solved materially, including the unlimited bond buying from ECB.
  • edited September 2012
    Reply to @Sven:

    Using EzBack Test, since the inception of PQIIX on 12/14/11, it has had a lower standard deviation (9.2) and higher sharpe ratio (0.95) than TIBIX (11.5, 0.84). Also, during the downdraft of 5/1/12 - 6/4/12, losses were as follows: VT (11.22%), TIBIX (6.73%), and PQIIX (5.78%). PQIIX is very young and the future is unknown, but so far, so good for this fund.
  • Mrc, if you can access TIBIX (Thornburg's institutional share class) and PQIIX, I would put some dollars with both, given them some time, and make a decision on whether you want to own one or both over the long haul. It makes no sense to get into a discussion about who was the most important of the management team at a particular fund at a particular time. What matters to you, going forward, is bottom line over the long haul. Both funds have a mandate to owning companies that grow dividends. The only difference I see from a fundamental standpoint is that PIMCO will use derivatives and other enhancements with its cash to boost returns, while Thornburg will keep cash extremely low, investing it in the companies they find attractive. They typically own just 70-80 stocks, so fairly concentrated. My guess is that PIMCO will do the same, since the managers drank from the Thornburg well in Santa Fe.
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