Bond mutual funds analysis act 2 !!

FD1000

Below is what I posted on 1/31/2020

Performance..1 month...YTD as of 1/31/2020
• Multi
• PDIIX……1.5.....
• PUCZX….1.1..…
• JMUTX....1.15....
• JMSIX.....0.8……. (JGIAX)
• Multi(high % securitized)
• PIMIX.....0.8….
• EIXIX…..1.1….
• VCFAX...1.3...
• IOFIX.....1.8....
• SEMMX...1.3.... (ST duration, 3 year SD less than 1, over 30% IG bonds-good cash sub)
• DHEIX….0.6…..4.85 (ST duration, 3 year SD less than 1, over 80% IG bonds-good cash sub)
• HY Munis
• PHMIX…..2.1.....
• NHMAX....2.7.....
• MMHAX....2.0.…..
• OPTAX.....2.4....
• ORNAX….2.6……..
• GHYAX......2.1......
• GWMEX….2.6…... (IG Munis but BBB+A rating)
• NVHAX……1.7……. (ST duration HY Munis-lower SD than the above)
• Inter Term CORe/CORE PLUS
• USIBX.......2.1.....
• BCOIX......1.9…....
• PINCX……2.1..…….
• BND….......2.0…......
• Bank Loans/Floating rate
• EIFAX.......0.5.....
• Uncontrain/Nontrad
• IISIX..........0.7....
• PUTIX......-0.1….
• PAJZX……0.7….
• HY +EM
• HYG.........-0.5.....
• PHIYX.......0.....
• ZEOIX……0.3…….(ST HY, 3 year SD less than 1, good as cash sub)
• FNMIX……1.4…….
• Corporate
• PIGIX….…2.5..….
• Preferred
• PFINX…...1.5……
• OTHER
• FXAIX.…..0..…(SP500)
• PCI………0.9... (CEF)

Rating several good choices
Multisector+NonTrad-
SD less than 1=SEMMX,ANFIX,ANGLX,DHEIX…
SD less than 1.5=IISIX,TSIIX…
SD less than 2=VCFIX,/VCFAX,JMUIX/JMUTX,PIMIX…
SD less than 2.7=IOFIX,PUCZX,DPFNX,JMSIX

HY Muni-…
SD less than 2=NVHIX,WHYIX,ISHYX…
SD less than 3=NHMRX/NHMAX,GHYIX/GHYAX,MMHIX/MMHAX

Core+Core plus-…
SD less than 1.5=FIJEX…
SD less than 3=PINCX,GTO

Observations:
2020 OPENED WITH A BANG FOR BOND OEFs. Rates were down and many funds did nicely.
Multi- Another good month and especially for IOFIX. SEMMX did great for its low SD.
HY Munis continues to be a great category with 2+% for a month.
Inter term – did fantastic because rates were down
Bank loans – are lagging
Uncontrain/Nontrad-are lagging and PUTIX fell off the cliff
HY+EM – HYG lost money and EM did pretty well.
Corp – This category was on fire because of the rate cut.

===========================
Generic Views

My 2 favorite categories are Multi+HY Munis.

HY Munis-The funds that I usually invest in are NHMAX,OPTAX,ORNAX.

The Multi funds I’m interested are IOFIX,EIXIX,VCFAX,PIMIX,JMUTX,JMSIX/JGIAX,PUCZX but IOFIX is usually the leader. SEMMX did very well for a very low SD fund.

Investors who don't mind and understand the risk, may use SEMMX,DHEIX,ZEOIX as a "cash sub" LT, see 3 year SD less than 1(link). In taxable, you can use ST duration Munis. NVHAX duration is about 4 which is between ST to LT. I remember so many posts in 01/2019 about MM/CD that were paying just 2-2.5%.

============================

Any question or subject about bond mutual funds (not CEFs) is welcome in this thread. I will try and answer all of them.

Old_Skeet

@FD1000: Thanks for posting your observations and performance on a selected number of income funds. This interest me as I own a couple of the funds that you follow and find your comments of good value. Old_Skeet

Crash

Yes, it's a handy, quick resource, actually. I can compare with my own funds, at least.

FD1000

My intention is to put forward several of my best ideas and compare them to funds that others own. So, if you have any fund in mind we can discuss it.

I'm also looking to make more than the average with bond funds but still, have reasonable low volatility, if I can make 20-30+% more money with portfolio overall SD lower than 2.5 than I accomplish my goals.
Bonds are where great managers can add performance + sometimes lower volatility compared to a generic index such as BND.

HY Munis continue to be my favorite category. OPTAX jumped 2 days, each at 0.9% which is very unusual. YTD...OPTAX 4.3%...NHMAX 3.65...ORNAX 3.4% (chart).

Gary1952

Thanks for restarting.

MikeM

Thanks FD, good stuff.

BigTom

“I can make 20-30+%“

Funny thing about quoting percentages is that seem higher than they appear to be.

Say if a bond fund returns 3%, a 30% increase amounts to less than 1% increase in return.

Is the effort worth it for a tiny 1% increase in return?
Are other assets classes (stocks) or asset allocations (stock to bond ratios) better to target?

johnN

thx Sir...have put couple of those funds mentioned/recommend on watchlists

FD1000

BigTom said:

“I can make 20-30+%“
Funny thing about quoting percentages is that seem higher than they appear to be.
Say if a bond fund returns 3%, a 30% increase amounts to less than 1% increase in return.
Is the effort worth it for a tiny 1% increase in return?
Are other assets classes (stocks) or asset allocations (stock to bond ratios) better to target?

@BigTom
Nope, it's not only 1% increase it's much more than that.
Several examples:
1) PIMIX vs BND (link)=in the last 10 years PIMIX made 5% more annually with higher SD(but still low) and much better Sharpe+Sortino
2) IOFIX vs BND (link)=IOFIX made almost 8% more annually with similar SD and much better Sharpe+Sortino.
3) A relative used to invest in MM, I told him to use SEMPX instead after I explained it to him. In 5 years SEMPX made 4.4 while VG VMMXX made 1.2%, this is more than 3% annually.
4) I told another relative to use HY Munis instead of some of his MM/CD and he made over 7% in the last 3 years instead of 1.5-2%.

This tread intention is to discuss only open-ended bond funds.
Not stocks vs Bonds
Not CEFs vs bonds
Not asset allocation
Not how anybody invests currently and in the past.
Not about retirement or accumulation phase.
If you like to discuss the above non-related topics please start a new thread.

It's a pretty simple concept, you post a bond fund and we discuss it generally and compare it to other funds.
So, do you have a bond fund in mind you like to discuss?

Mona

This tread intention is to discuss only open-ended bond funds.

Not stocks vs Bonds
Not CEFs vs bonds
Not asset allocation
Not how anybody invests currently and in the past.
Not about retirement or accumulation phase.

If you like to discuss the above non-related topics please start a new thread.

+ 1

Gary1952

BigTom said:

“I can make 20-30+%“

Funny thing about quoting percentages is that seem higher than they appear to be.

Say if a bond fund returns 3%, a 30% increase amounts to less than 1% increase in return.

Is the effort worth it for a tiny 1% increase in return?
Are other assets classes (stocks) or asset allocations (stock to bond ratios) better to target?

You will find out when the floor falls out from under an equity. Loss of 2% in one day? No problem. Bond OEFs move much slower.

Crash

"My intention is to put forward several of my best ideas and compare them to funds that others own. So, if you have any fund in mind we can discuss it.

I'm also looking to make more than the average with bond funds but still, have reasonable low volatility, if I can make 20-30+% more money with portfolio overall SD lower than 2.5 than I accomplish my goals.
Bonds are where great managers can add performance + sometimes lower volatility..."
Might you do me the favor of including these three?
RPSIX PRSNX PTIAX.
Thank you very much.

FD1000

Let's look at RPSIX PRSNX PTIAX and compare them to several other Multi sector funds in my list such as VCFAX,JMUTX,PUCZX,IOFIX

Looking at PV (link)

You can see below that VCFAX,JMUTX,PUCZX,IOFIX are better RPSIX PRSNX PTIAX The last 2 columns are Sharpe +Sortino.

See this link (link)

Crash

Thanks for your work, sir. It's all very trim and easy to see.

FD1000

The 10 year treasury is down again.  TLT (20+ treasury ETF) is at all-time high.  That's a good time in bond land 

FD1000

DODIX is a top fund in the Intermediate Core-Plus category. I like to show how a good Multisector fund can have better performance, SD=voltility and why Sharpe+Sortino are higher.
See 3 year performance at PortVis(link)

See the chart (here)

Tarwheel

Crash - Since you seem to be interested in TR Price bond funds, you might want to check out PTTFX, TRP Total Bond. It’s been around about three years and has done very well. It’s what I would call a high quality multisector bond fund. Unlike RPSIX, it holds no stocks, and it has fewer foreign bonds than PRSNX. I have split the bond allocation in my Roth IRA between RPSIX and PTTFX because I wanted a “purer” bond fund that wouldn’t drop when stocks had a bad spell (unlike RPSIX).

FD1000

@Tarwheel, you are correct, M* puts PTTFX in the Intermediate Core-Plus category but I would call it MS(Multi Sector) light.

The best risk/reward category over the last several years is securitized.

M* says that PTTFX has over 50% in it and it's the biggest category.
VCFAX has about 90% in securitized...JMUTX 49%...PUCZX 32%...IOFIX 90+%.
Portfolio Vis (link) shows that VCFAX,JMUTX,PUCZX have better performance, SD, Sharpe, Sortino.

Crash

@Tarwheel I shall certainly look at PTTFX. I did consider the very thing you mentioned about RPSIX, and initially decided that I liked its monthlies, and if there's a bit of a boost at the end of the year from the small position in stocks, all the better. I'm still trying, but not very hard, to get to 60 bonds, 40 stocks. Right now I'm 56 bonds and 36 stocks, and 7 cash. My fund managers, together, have all decided in the aggregate to create that 7 percent in cash. And there might be 1 or 2 percent in "other."

Crash

@Tarwheel Just gave it the once-over. The monthlies are too lean for me. I note that January's was under .03 cents/share. I'm not using monthlies YET, but when I do, I want those distributions to be worth something. Expenses here in the 50th State are high. I've seen a stat. which claims Hawaii's cost of living is 80% higher than the US average. I believe it. Gas for the car is running about $3.65/gallon.

catch22

@Crash
I know this has been discussed several times over the years here. This link has several view points for data.
Always buy at least one lotto ticket a week, when living in Hawaii.


Cost of Living index, U.S. states

Crash

Just looked at that thing, @Catch22. No surprises. We are quite lucky re: housing. We're paying two-thirds of what by rights ought to be expected for rent (3BR) here. But also: 3:30 p.m. on Feb. 21 and weather is 76 degrees with "a few clouds," according to the NWS. Jimmy Buffett sang: "I wish I were somewhere other than here." Not me. And the little guy is just 3 years old. Last night, he heard me listening to the Allman Bros. "Jessica." He walked into my room and danced and danced with me, until the song was over. And that's a long song! So yes, it's fun here. And when he gets to screaming and crying, his mother and dad can deal with THAT.

FD1000

Why IOFIX?
I wasn't comfortable investing in this fund but after several years of solid performance, I like it.
The managers also provided excellent presentations, see the last (one).
Another good article written by Charles Boccadoro can be found at MFO (link)

Gary1952

Reading online what I can about IOFIX, the word is that the majority of default legacy loans are gone. Only good ones are left. Makes the portfolio more solid. Who knows.

FD1000

HY Munis (OPTAX,ORNAX,NHMAX) continue their up trend.
YTD...OPTAX 5.6%...ORNAX 4.7%...NHMAX 4.9-5%

FD1000

So far for YTD and the last several crazy days, IOFIX easily beat all these "lower volatility" multisector funds.

See YTD (chart) of IOFIX,PIMIX,VCFAX,PUCZX,JMSIX,JMUTX. The chart shows up to 2/27 but when I copy the link it's only to 2/26

IOFIX is the only fund that is still at the high for year.

dtconroe

You may want to evaluate peak to trough performance, as a factor worth tracking in periods like this. If you look at your YTD charts, and you focus on the last week, PUCZX is dropping like a rock, and gives you some insight into how well it will perform in downmarkets--it has one of the worst peak to trough performance records of multisector bond oefs in downmarkets, and once again it is showing that performance pattern. VCFAX is doing very well in this market sell off/correction, has very good peak to trough performance history, and gives you some insight into a fund that does very well in downmarkets. Sometimes, periods like this provides some good educational information regarding performance characteristics of the various multisector bond oefs, in downmarket periods.

Crash

Thanks for that, @dtconroe. Astute.

FD1000

PUCZX is a fund with several moving parts and why it's harder to predict every move. PIMIX is another fund like that. PUCZX is down 1.4% from its top while PIMIX is down "only" 0.7% but for 3 years PUCZX performance is better than most. BTW, IOFOX SD is higher than many but its performance is way better than most.
According to MFO databased when you search for Multi sector funds for 3 years + best martin ratio you get the following funds

Fund performace
ANFIX 5.3
IOFIX 10.6
SEMMX 5.1
BDKNX 5.7
ANGLX 4.2
PUCZX 7.2
ZEOIX 3.3
IISIX 5.2
TSIIX 4.9
JMUIX 6.2
RCTIX 7.8
DPFNX 6.2
ENIAX 3.9
JMSIX 6.1
MINC 2.9
PIMIX 5.7


For several years I have been using mainly a subsector of Multi which is securitized. The following funds have at least 85+% in it. DHEIX,SEMMX,VCFAX,DPFNX,IOFIX. In this category, SEMMX has the best performance for SD<1 and IOFIX has the best performance over 10% annually for SD< 2.7. There are only 2 Multi funds with performance over 7% RCTIX,PUCZX.

Tarwheel

PTIAX has held up very well and gone up YTD more than any of the multisector bond funds that I track. It’s mid and long term returns are also excellent.

FD1000

Tarwheel, I'm glad you mentioned PTIAX. It has a very good YTD performance and a huge jump of 0.47% yesterday. I tend to forget it sometimes. PTIAX invested mostly in securitized + smaller portion in Munis and both have done well but PTIAX performance is more influenced by rates too and will not do well when rate increase.