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Bond mutual funds analysis act 2 !!



  • @FD1000 - do you hold any bond mutual funds at this time? Do you hold any equities? Or are you all/mostly in cash?
  • edited February 2020
    This is a very unique time for me and why I will answer your question:-)

    My goals as a retiree are: I need to make only 4.5% including inflation (Based on 2019, maybe I need only 4%) average annually to sustain our standard of living. But, I still want to make 6% with the lowest volatility (SD < 3) and never lose more than 3% from any last top.

    YTD mostly in 2 bond funds investing at a higher % in NHMAX + lower % in IOFIX. Last Thursday, I sold half of NHMAX. On Friday, I sold all of NHMAX + most of IOFIX. This YTD (chart) is the answer to why.

    So, why now? rates went low very quickly, NHMAX is up nicely YTD. I want to bank my sure money. Later. I will enter again depending on markets. Maybe a ST fund like NVHAX or less "risky" fund like OPTAX.

    IOFIX did so much better than most other Multisector funds, again, I'm taking my profit and watching. There is no way to be sure how IOFIX will do if markets go wild.

    VIX is extremely high and stocks crashed very quickly this week. I bet our Fed (and maybe other abroad) will do something, I will buy 10-20-30% stocks based on markets.

    Volatility is my friend.

    Generally, I'm rarely in cash. In the last 10 years, I was in cash for 2-3 weeks in 2013 and Q4/2018. I go to cash when I'm not confident about markets and especially about bonds.

    The above is beyond the scope of this thread and just for info purposes. As I posted before I like to keep this thread as BOND OEFS analysis.

    I don't mind discussing trades, my style or any other subjects (including stock funds or investment concepts) on a new thread.

    I will make another substential post tomorrow for the month of February and more thoughts.
  • Thank you. I appreciate the answer and I understand your positioning as well.
  • Yes, indeed. It left me smiling, yesterday.
  • @FD1000, you sold NHMAX and the chart you show, to me, says anything but sell. If I remember correctly you like to base your in-and-out on trends. The trend is up for quite a long while. What am I missing.

    I bought NHMAX while you were selling and so far very glad I did.
  • MikeM, usually you are correct but in rare cases, I go with what I feel is right based on my goals. I can't lose either case. If rates go down I "miss" the opportunity but I already made a big chunk of my yearly goal. If rates go up, I will not lose.
    I'm going to sit out for weeks.
  • edited March 2020
    Analysis at the end, after the performance. week as of 2/29/2020

    JMSIX.....1.4….-0.1 (JGIAX)
    Multi(high % securitized)
    SEMMX...1.8....0    (ST duration, 3 year SD under 1, over 30% IG bonds-good cash sub)
    DHEIX….1.4….0.35 (ST duration, 3 year SD under 1, over 80% IG bonds-good cash sub)
    HY Munis
    GWMEX….5.3…...1.5  (IG Munis but BBB+A rating)
    NVHAX……2.8……0.4  (ST duration HY Munis-lower SD than the above)
    Inter Term CORe/CORE PLUS
    Bank Loans/Floating rate
    HY +EM
    ZEOIX……-0.1….-0.8 (ST HY, 3 year SDCorporate
    FXAIX.…..-8.3..…-11.4  (SP500)
    PCI………-5.4... -7.6  (CEF)
    “CASH SUB" (most with 3 years SD under 1 or close to it)
    ZEOIX…-0.1….-0.8 (ST HY)
    SSTHX….-0.85….-1.2  (ST HY)
    BTMIX….1.3.…0.3 (ST Muni but I prefer NVHAX for LT)


    Last week was a clear way to separate the winner from the loser. Rates were down dramatically, stocks are in correction and panic is in the air. Since last week was such a major one I decided to post about YTD + one week.

    Multi- mixed bag last week.  PIMIX+PUCZX lost badly while PTIAX shined. Most in securitized did OK

    HY Munis continues to be a great category with 1+% for the week and very strong YTD and much better than Inter-Term higher rated funds.

    Inter term – did well as expected when rates are down

    Bank loans – as expected were down but not as much as HY.  I use this category only when I know rates are going up.

    Uncontrain/Nontrad-are lagging and not impressive which tells you it’s usually not a good category LT

    HY+EM – both lost money last week and not doing well YTD.

    Corp – This category did well last week and YTD but PIGIX didn’t do well last week.

    SP500-in correction

    PCI-as expected from a CEF it was down last week.  At times like this CEFs are exposed.

    “CASH” Sub-a unique category to make more money with minimal risk at SD less than 1.  It is obvious the best funds(SEMMX,DHEIX,PMZIX) are mostly in securitized which is my favorite category anyway. DHEIX has 80+% in investment-grade bonds if you like "safer" bonds.  SEMMX has the best peformance. PMZIX has done well YTD but not as good as the first 2 for 3 years.


    Generic Views

    My 2 favorite categories are Multi+HY Munis.

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

    The Multi funds I’m interested are SEMMX,IOFIX,EIXIX,VCFAX,PTIAX,PIMIX,PUCZX,JMUTX,JMSIX/JGIAX.  SEMMX is the best performer for SD < 1 and IOFIX the best for SD<2.7. VCFAX+EIXIX are pretty good and invest at 85-90+% in securitized.  JMUTX+JMSIX are more diversified, actually, JMSIX was a nice surprise of losing just -0.1%. PIMIX+PUCZX are funds with moving parts and did worse than others, they are now going to my second-tier list. PTIAX has the best momo YTD so I have to pay attention.

    “CASH” Sub-Investors who don't mind and understand the risk, may use SEMMX,DHEIX(ZEOIX is off the list)  as a cash sub LT, see 3 year SD<1(link).  In taxable you can use ST duration Munis. NVHAX duration is about 4 which is between ST to LT

    IISIX disappointed.  Last year It looked like a better option for 3 years but VCFAX is the winner.  Again, funds with too many moving parts(PIMIX,PUCZX,PUTIX,PAJZX,IISIX) didn’t do well at this time of need.
  • FD,

    Nice work!


  • If I may, while the closing share price for PCI was off -7.6% for the week the NAV price was down by only -1.6%. (For those who don't mingle with CEF's the share price is what other investors are willing to pay you for your share.) So yes, the premium was slashed by -7.6% but I don't expect that to last.
  • edited March 2020
    Mark, I have heard this claim for years, the NAV is still OK but in reality, you trade the price and the only one you have access to your money ;-)
    I do agree the NAV is an important aspect of valuation+trading and in many cases, it's clearer to see when a fixed income CEF is on sale than a stock mutual fund.
    I also agree that PCI is a better value now but there is no way to know if we are closer to the bottom. In most cases, based on the past, you are correct..but, are we now in a similar case or different? the future will tell us :-)
  • FD, I agree somewhat with that assessment. It's true that price is what one trades but NAV more accurately demonstrates positioning of the fund or dare I say management capability. Management has little control over the share price (I think) but they do control the NAV. Like you I have no idea whether PCI has bottomed or not but I would be quite surprised to see it selling at much of a discount if any at all. It's currently at a 2.44% premium to NAV.
  • edited March 2020
    >> ... make only [4%-]4.5% including inflation ... average annually to sustain our standard of living. But I still want to make 6% with the lowest volatility (SD < 3) and never lose more than 3% from any last top.


    I am sure many of us, who like you have lucked out so fully in the bullish past decades, will be following your postings and decisions w great interest.

    When you say including inflation you do mean just that, right? Not above inflation. (Not being snarky; just that some writers get that backward, same as, say, writing 'impossible to underestimate' when they meant 'impossible to overestimate'.)
  • @davidrmoran
    When I say 4.5% including inflation it means exactly that. These numbers are based on 3% inflation. In 2010 I planned my retirement date to be at the end of 2017. I postponed it by one year because private healthcare (ACA) triple in price. So, from 2010 to 2018 I gradually decrease our portfolio % in stocks and increase bonds. Since 2018, I mainly invest in bond + make several trades in riskier stuff(stocks,ETFs,CEFs) for days and weeks.
    I used to own a large % in PIMIX for years from 2011-2018. This is the performance of PIMIX vs 50/50 SPY/BND (link)

    The 6% is just a goal but I happened to make more in 2018-2019. According to my Schwab account, my portfolio SD for 2018-19 is 1.7. In Q4/2018 when the SP500 lost almost 20%, my portfolio was down less than 1%. In the last 2 weeks, when stocks lost 12+% my portfolio made money every day.
    Let's stay on the topic of this thread Bond fund analysis.
  • @FD1000, could you elaborate more on your view of ZEOIX? While previously recommended by some, it clearly disappointed last week. But, it does demonstrate the risks of investing in funds with short maximum drawdown history.
  • @guilhermes
    ZEOIX had a good record for several years but HY have their problem when markets collapse. Losing -0.8% is a lot of money especially when you compare it to DHEIX which has over 80% in IG rating bonds. BTW, ZEOIX also lost -0.6% in Q4/2018.

    I'm just giving several options. If it was me and I was looking for a "cash sub" fund I would use DHEIX and not ZEOIX. See (chart)
  • I agree but ZEOIX has a shorter duration ( 0.57 vs 1.4) so will handle rising rates much better

    BTW how do you easily access the older and much better fund pages at M* ? your link works but I cant get it to load any other fund's profile
  • edited March 2020
    Duration is not a guarantee to work better. Securitized is a special sub-category. Funds like PIMIX with duration=0.68 can lose money pretty quickly. Duration works better with simple index high rated funds.
    You want to own funds that do well in increase/decrease rates but rates have been decreasing for decades.
    The only time I use HY or bank loan (ST) is when I'm sure rates are going up which is not that often. The nice thing about securitized is the fact they handle increase rates well too + Multi sector managers can use swaps/derivatives (like PIMIX managers) to handle that.

    With M* you need to use the link directly and change the fund ticker directly.
    2 examples:

    Then, you can use any tab except the quote which will take you to the new way. The old way is much better.
  • There is so much talk and hype regarding IOFIX that I decided to check it out.

    Although it is very expensive for a bond fund, its returns are phenomenal and its metrics appear to be very reasonable for the most part.  Even the SD is reasonable relative to its returns.

    High sharp ratio and martin ratio, excellent UP/DOWN capture ratio, Great Owl and a risk profile of only "2", etc.

    It seems to have performed reasonably well in up and down interest rate environments, albeit in its short life.

    I am considering opening a relatively small position (5% - 7%) in my ROTH to add a little punch.  I currently own JMUIX and VCFAX.  I am very happy with both current MFs and have no plans to eliminate or reduce % invested; I have cash to invest in IOFIX.


  • Is there information about the liquidity of the assets held by IOFIX? I ask because I held the fund in the past and sold because I was concerned that assets values did not seem to be revised in systematic periodic intervals. Has there been any recent discussing on this topic?
  • edited March 2020
    I don't promote or recommend funds but discuss them. You need to make your own decisions based on your goals and due diligence. We have different goals and styles.

    I don't know how you can get liquidity info and you can't predict it but I can tell you I owned several of the Multi sector funds in the past and traded several hundred thousand each time without a problem. You should only do what is comfortable for you.
  • FD fair point.

    Do you have any thoughts or opinions about IOFIX.

    For example, I was surprised that it has a risk profile of 2.

    Also, when I compared monthly returns it faired very well in down periods and better than many other MU oefs.
  • On March 1st I said "SEMMX is the best performer for SD < 1 and IOFIX the best for SD<2.7"

    MFO fund screener(<a href="">link) says IOFIX is the best performer for 3 years for the Multi sector category.
    Please read the presentation by the fund (link). There is no guarantee of what will happen in the future. I think the worse was in 11/2018 when IOFIX lost more than 1% in one day.
  • edited March 2020
    I am strongly debating switching from bond OEFs, which currently comprise 10% of my dad’s income-managed retirement portfolio (essentially bucket 1), to bond ETFs (and i friggin’ hate bond ETFs/indexes).

    At TDA, the 180-day holding period made it hard to opportunistically sell out of bond holdings (albeit temporarily) to purchase things that were selling off (and had become good values), such as the PIMCO CEFs (some of which traded at 1.5-2% higher yields last week). VCIT, VCSH, and some of the more conservative (oxymoron?) IG CEFs, such as BTZ and TSI. Currently hold IOFIX (arguably the best multi-sector), PONAX (steady ~5% income), and SEMPX (enhances cash) in this spot. I know OEFs (esp bond OEFs) aren’t for trading...

    Ugh. That means I would be holding bond funds for ballast. Yikes....
  • IIRC, TDA has the longest holding period among major brokers. Fidelity. Schwab and E-Trade have 60 or 90 day holding periods to avoid transaction fees. Unfortunately, at TDA, bond ETFs may be more practical than bond OEFs.
  • PONAX/PUCAX (the versions I hold) continue to track the movements of stocks. IOFIX continues to perform (or at least be unchanged) on these big down days:)
  • Rates are down sharply so it's not a surprise that higher-rated bond funds are doing pretty well...but..what about the rest

    HY Munis are not working since last week and why I'm still waiting.

    PTIAX continues to shine.

    IOFIX is doing best within securitized. SEMMX is great for SD < 1.

    JMSIX is coming from behind, I usually don't ask for advice but this time I asked my FI specialist and he recommended JMSIX because they increased their higher rated bonds and lengthen their duration and why it's up nicely over 1% since last week ER=0.40 is low and no fees at Schwab.

    JMUTX is behind the leaders. PUCZX is watching the above from behind and PIMIX fell off the tracks.

    HY-as expected are down but Bank loans continue their downtrend too.
  • edited March 2020
    The following is a research I have done for myself
    I was looking for a fund to park my money until things come down but also make some money and searched for the followings:

    1) higher rated bonds.

    2) flexible. The above 2 mean...the Intermediate Core-Plus category.

    3) The securitized category should be the biggest because this category behaves better in rate changes. Also some IG Corp bonds.

    4) higher income than 3% which is harder to find in a fund with higher rated bonds.

    5) ST+LT + last 1-2 weeks with good performance

    and I found only one winner PINCX(link). ER=0.74....AUM=2.7 Bill....yield > 3%....IG rating > 90%....Duration=5.1....securitized > 62%

    TGLMX has better performance YTD but not 1-3 years and no corp but Yield=3.9%. PTIAX is another possibility, mainly in lower-rated securitized + some Munis, yield about 3.9%. PINCX has better performance for YTD+one year. (Chart) of all 3.

    BCOIX,DODIX,USIBX,PDBZX performance trails for YTD,1,3 years and yield < 3%
    GTO is another option.

    Basically, all the funds I mentioned above are pretty good.
  • Appreciate your commentary FD1000 and others. Always find something to take away and ponder.

    Curious as to your thoughts regarding:

    FPFIX, FPA Flexible Income Fund, appears to hold higher rated bonds and potentially has capability to deal with rising interest rates

    Dominion Energy Reliability Investments, works like a money market, free redemption on demand, complete access to your funds at any time, 2.7% for investment over $50k, on line access, NOT FDIC insured but than again neither are any of the bond OEF being discussed either

    Good Health to all,

    Baseball Fan

  • edited March 2020
    FPFIX is a pretty good fund invested mainly in securitized and low duration=1.7 and a good "cash sub". Another similar fund is DHEIX with duration=1.4. Both invested mostly in IG bond rating. I like DHEIX a bit more because it's yield = 3.9 while FPFIX = 2.6.
    Securitized is my favorite category for years because deals better with rates.

    I ran it thru Port Vis (link)
    and DHEIX looks better for performance, SD and Sharpe
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