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FAFRX (bank loan) continues to do well YTD. Other good ones are GIFIX, then FFRHX. The first two funds...YTD>7%...one year>10-11%...3 year>19-21%. All 3 funds SD is about 4.2. But that's not all, compare this to PRCPX+TUHYX and you can see that HY has a much higher volatility. You want to achieve higher performance with lower volatility.
To see the volatility use only two funds: BL=FAFRX vs HY=TUHYX. See (https://schrts.co/vsTRCtXv) For YTD from Peaks and troughs, FAFRX was down only 1.5%, but TUHYX lost over 5%
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For me, Dan Ivascyn is the most crucial for me to understand bonds and what to do. For many years, Dan Ivascyn has been saying the same thing which is "I can still find opportunities in MBS that I like".
As a retired and conservative investor, and as long as the Fed keeps raising interest rates, I am staying in risk-free MM's and CD's. In the future, I might be looking at bond OEF's like CBLDX, RCTIX and TSIIX, for example.
But, in the meantime, I see no urgency to invest in bond funds, and since I don't need a lot more money, I prefer to err on the side of caution.
As a retired and conservative investor, and as long as the Fed keeps raising interest rates, I am staying in risk-free MM's and CD's. In the future, I might be looking at bond OEF's like CBLDX, RCTIX and TSIIX, for example.
But, in the meantime, I see no urgency to invest in bond funds, and since I don't need a lot more money, I prefer to err on the side of caution.
Fred
Hey Fred, how far out are you going with your CD selections?
@Fred495 + 1. It seems as though risk free 5% is possibly the “ magic number “ for many conservative investors . Which leads me to ponder what is a win? For me I am starting to think in terms of dollars instead of an arbitrary per cent.
As a retired and conservative investor, and as long as the Fed keeps raising interest rates, I am staying in risk-free MM's and CD's. In the future, I might be looking at bond OEF's like CBLDX, RCTIX and TSIIX, for example.
But, in the meantime, I see no urgency to invest in bond funds, and since I don't need a lot more money, I prefer to err on the side of caution.
Fred
Hey Fred, how far out are you going with your CD selections?
Max. of two years, dt, and only from large national banks (i.e., "too big to fail"). During that period I expect there to be a stock market correction and, perhaps, some additional opportunities in the equity market will present themselves. Hope springs eternal.
Hey Fred, how far out are you going with your CD selections?
Max. of two years, dt, and only from large national banks (i.e., "too big to fail"). During that period I expect there to be a stock market correction and, perhaps, some additional opportunities in the equity market will present themselves. Hope springs eternal.
Good luck,
Fred
Thanks Fred--I have several CDs maturing in the next 6 months, and if I can get CD rates at 5+%, I will likely buy new CDs with that money. 2024 is a big question mark for me, regarding future investing in CDs.
FAFRX (bank loan) continues to do well YTD. Other good ones are GIFIX, then FFRHX. The first two funds...YTD>7%...one year>10-11%...3 year>19-21%. All 3 funds SD is about 4.2. But that's not all, compare this to PRCPX+TUHYX and you can see that HY has a much higher volatility. You want to achieve higher performance with lower volatility.
To see the volatility use only two funds: BL=FAFRX vs HY=TUHYX. See (https://schrts.co/vsTRCtXv) For YTD from Peaks and troughs, FAFRX was down only 1.5%, but TUHYX lost over 5%
I have been saying for several weeks that rate hikes are at the end. Another +0.25% isn't going to change much. Bank loans continue going up. FAFRX went up another 0.26% today with YTD=8.1%. The 2 biggest things I changed compared to a "normal" market are more trading + staying days-weeks in MM which pays around 5%. I'm also pretty sure that certain categories will do nicely in 2023.
For me, Dan Ivascyn is the most crucial for me to understand bonds and what to do. For many years, Dan Ivascyn has been saying the same thing which is "I can still find opportunities in MBS that I like".
Same here. Dan and Richard Clarida, back at Pimco from a stint at the Fed, gave a great presentation of Pimco's latest cyclical outlook a few weeks back.
Another bond asset that's been good lately: EM debt. The dollar-denominated etf I use in that category is up 8.3% ytd. Of course volatility is an issue for EM assets.
To each their own, @Crash. Thought I'd mention it since there doesn't seem to be much talk beyond junk, mortgages, and bank loans.
Bank loan funds on track for their second best year in history. A few non agency mbs funds on track for double digit annual gains. Junk bonds, if history is any guide will also enjoy double digit gains this year. Even the commercial real estate bond fund I love to hate is on track for a 10% gain. If the 10 year can right itself like the past few days many other bond categories will join the party. I fully understand the logic of money market, CDs, and Treasuries at these high rates but……
Congrats to @Crash for staying strong with one of the better junk bond funds in 2023 (TUHYX)
Yep, happy days are here again may be the theme song looking ahead for the bond universe if the inflation + rate hike story is really fading as the numbers show now. Which is the story Pimco was telling in their last outlook.
Fido's MM funds are nearing 5%, which is fine by me as I continue holding longterm losers BND and BSV and VGIT, and must also be approaching $2T. I wonder how they will be able to continue with such growth.
Yep, happy days are here again may be the theme song looking ahead for the bond universe if the inflation + rate hike story is really fading as the numbers show now. Which is the story Pimco was telling in their last outlook.
It’s at least a more level playing field with the 10-Yr. Treasury now in the 4% range compared to a couple years back. Of course, by taking just a little more credit risk you can net a percent or two higher.
@hank, if you do not mind, pl share how you picked BAMBX over other alternatives. M* chart shows the fund made 0.13% over the past 1 yr but the chart does look steady.
@BaluBalu. Thanks for your question. However, FD’s comment below makes sense. So I have completely deleted an earlier discussion of BAMBX in this space because it is not a bond fund and does not belong in this thread. In addition, I will delete my earlier reference to AOK in the earlier post you have asked about. I agree with FD that it’s important for everyone to follow the rules.
Hank This thread is about "Anybody Investing in bond funds?" Please post about bonds since we have more threads about stocks/allocation/multi-strategy. My calls are based on what I see in the markets. The Fed have been raising rates aggressively. The CME FedWatch is a good tool telling us about the future and it changes rapidly. And, inflation has been coming down. You put it all together and why I made the assumption that rates are near the top.
Bob Dylan: You don’t need a weatherman To know which way the wind blows.
- Would a fund like RPSIX (an income fund with 90% bonds and 10% equities) be acceptable here, or must all the funds discussed have 100% in bonds?
- Does the name bond have to be included in a fund’s name?
- Also, can the “bond funds” discussed here hold any cash? (It was my earlier impression they could.) BAMBX is over 90% fixed income, but has a lot of cash.
- Also, would 30-day T-Bills in a fund be OK here? Some investors count those as cash. So, maybe exclude shorter term funds? Limit thread to just those with 1- year or longer duration?
- How about Convertible Bonds? Can we discuss those here?
Please clarity what the rules are regarding the above. Thanks.
Hank, thank you for deleting part of your previous post. There is not a "pure" definition of bond funds and you know it. Use your judgement.
Let's look at BAMBX "Strategy: The fund seeks to achieve its investment objective by investing in a range of global asset classes, with a focus on fixed and floating rate debt securities and equity securities. It will normally invest in both U.S. and non-U.S. securities, including securities of companies located in emerging markets."
Convertible: I'm posting for about 15 years and I haven't seen much discussion about it. Hybrid security. A convertible bond pays fixed-income interest payments, but can be converted into a predetermined number of common stock shares. I also would not include preferred stocks
CEFs: they are leverage FI but again not really part of your typical bonds.
RPSIX is OK, but LT I prefer PIMIX which has better performance for YTD, 1-3 years (https://schrts.co/fVnIsDbp)
=========
Observation: several unique MBS funds have shown good momentum in the last several weeks. Even PIMIX is on the run since the previous week. In my world, I hardly ever use HY,EM bonds because of their higher volatility.
YTD: FAFRX is at 8.5%, not too shabby + lower volatility than HY funds.
When analyzing bond oefs, I would suggest you become very aware of their derivative holdings, especially when pushing PIMCO funds. PIMIX holds 11+% in derivatives, along with long term treasuries. Those large negative "Other" categories are not insignificant. If you are skilled trader, you might be more adept at selling quickly, but if not, you can get burned pretty quickly if you don't understand what you are holding and investing strategies, such as leveraging.
Yep, we have discussed PIMIX for years. It's difficult to know exactly what they do at any given time. I used to own a lot of it prior to 01/2018. But perform Percentile Rank in its category is...1+3 year=20-22...5 years=15. Not too shabby for AUM=124 Billion. PIMIX has much high securitized and lower HY+EM bonds. Derivative is a complicated subject and difficult to quantify. But, because the ER=0.50/0.51, I think the leverage is very low.
In the past, I posted about RCTIX as a good "cleaner" securitized with better LT risk/reward, see 3 year chart(https://schrts.co/kCDynyVs)
There is a new kid in town...PYLD=Pimco Multisector Bond Active Exchange-Traded Fund. See (https://www.pimco.com/en-us/investments/etf/multisector-bond-active-exchange-traded-fund). Strategy: The Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in a multi-sector portfolio of Fixed Income Instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.
ER=0.55. See below its holdings...mmm... definitely unique.
I bought HYDB in 2021 and its down about 12% but might be about even with Div. I enjoy the monthly div @ over 8% but ALL I read is one needs to sell bond funds. Does anyone have any input on how safe it is or is it time to sell. PV shows its been a close race with PIMIX since 2021.
I bought HYDB in 2021 and its down about 12% but might be about even with Div. I enjoy the monthly div @ over 8% but ALL I read is one needs to sell bond funds. Does anyone have any input on how safe it is or is it time to sell. PV shows its been a close race with PIMIX since 2021.
HYDB lost 16% in 2022, but has gained nearly 4% in 2023. I wouldn’t care to have more than 10-15% of portfolio exposed to high yield bonds. But I’d hang on to the fund if it were me and I was under 10% allocated. Why lock-in a loss?
The “sell bonds” mantra here and elsewhere (which I think is overdone) pertains mainly to interest-rate sensitive bonds. It is based on a belief that interest rates will continue going up. High yield has other attributes and is less prone (but not immune) to interest rate risk. That’s not to say high yield is less risky; just that the risks are different from what we normally call “bonds.” Would really love to hear @Junkster’s take on your question. He’s the expert on HY.
I bought HYDB in 2021 and its down about 12% but might be about even with Div. I enjoy the monthly div @ over 8% but ALL I read is one needs to sell bond funds. Does anyone have any input on how safe it is or is it time to sell. PV shows its been a close race with PIMIX since 2021.
Just sold HYDB. Tiny position, small loss. The "opportunity cost" was making me itch. I could have just sat on it, but it was not serving my needs. And my two OEFs that are in junk were doing much better. But I took the proceeds, and together with proceeds from the sale of SCHP, I bought more shares in one of my equity positions that have been beaten-up.
Comments
But that's not all, compare this to PRCPX+TUHYX and you can see that HY has a much higher volatility. You want to achieve higher performance with lower volatility.
YTD Chart(https://schrts.co/CuXmBygK)
To see the volatility use only two funds: BL=FAFRX vs HY=TUHYX. See (https://schrts.co/vsTRCtXv) For YTD from Peaks and troughs, FAFRX was down only 1.5%, but TUHYX lost over 5%
TUHYX. junk YTD +6.6%
HYDB. junk YTD. +4.74%
SCHP. YTD. Tips. +0.83%
You're doing well with those others. Good on ya.
Ya, I own these. Exiting SCHP shortly.
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But, in the meantime, I see no urgency to invest in bond funds, and since I don't need a lot more money, I prefer to err on the side of caution.
Fred
Max. of two years, dt, and only from large national banks (i.e., "too big to fail"). During that period I expect there to be a stock market correction and, perhaps, some additional opportunities in the equity market will present themselves. Hope springs eternal.
Good luck,
Fred
Max. of two years, dt, and only from large national banks (i.e., "too big to fail"). During that period I expect there to be a stock market correction and, perhaps, some additional opportunities in the equity market will present themselves. Hope springs eternal.
Good luck,
Fred
Thanks Fred--I have several CDs maturing in the next 6 months, and if I can get CD rates at 5+%, I will likely buy new CDs with that money. 2024 is a big question mark for me, regarding future investing in CDs.
The 2 biggest things I changed compared to a "normal" market are more trading + staying days-weeks in MM which pays around 5%. I'm also pretty sure that certain categories will do nicely in 2023.
Another bond asset that's been good lately: EM debt. The dollar-denominated etf I use in that category is up 8.3% ytd. Of course volatility is an issue for EM assets.
BONDS: TUHYX junk +7.85% ytd.
PRCPX. junk, +5.97% ytd.
Congrats to @Crash for staying strong with one of the better junk bond funds in 2023 (TUHYX)
dRegards.
This thread is about "Anybody Investing in bond funds?"
Please post about bonds since we have more threads about stocks/allocation/multi-strategy.
My calls are based on what I see in the markets. The Fed have been raising rates aggressively. The CME FedWatch is a good tool telling us about the future and it changes rapidly. And, inflation has been coming down. You put it all together and why I made the assumption that rates are near the top.
Bob Dylan: You don’t need a weatherman To know which way the wind blows.
In your judgment …
- Would a fund like RPSIX (an income fund with 90% bonds and 10% equities) be acceptable here, or must all the funds discussed have 100% in bonds?
- Does the name bond have to be included in a fund’s name?
- Also, can the “bond funds” discussed here hold any cash? (It was my earlier impression they could.) BAMBX is over 90% fixed income, but has a lot of cash.
- Also, would 30-day T-Bills in a fund be OK here? Some investors count those as cash. So, maybe exclude shorter term funds? Limit thread to just those with 1- year or longer duration?
- How about Convertible Bonds? Can we discuss those here?
Please clarity what the rules are regarding the above. Thanks.
Hope @FD1000 will answer those 5 questions about his thread I tossed out earlier.
Let's look at BAMBX "Strategy: The fund seeks to achieve its investment objective by investing in a range of global asset classes, with a focus on fixed and floating rate debt securities and equity securities. It will normally invest in both U.S. and non-U.S. securities, including securities of companies located in emerging markets."
AOK: looking below, it's not
https://digital.fidelity.com/prgw/digital/research/quote/dashboard/composition?symbol=AOK
Convertible: I'm posting for about 15 years and I haven't seen much discussion about it. Hybrid security. A convertible bond pays fixed-income interest payments, but can be converted into a predetermined number of common stock shares.
I also would not include preferred stocks
CEFs: they are leverage FI but again not really part of your typical bonds.
RPSIX is OK, but LT I prefer PIMIX which has better performance for YTD, 1-3 years (https://schrts.co/fVnIsDbp)
=========
Observation: several unique MBS funds have shown good momentum in the last several weeks. Even PIMIX is on the run since the previous week.
In my world, I hardly ever use HY,EM bonds because of their higher volatility.
YTD: FAFRX is at 8.5%, not too shabby + lower volatility than HY funds.
PIMIX stat report as of 6/30/2023
But perform Percentile Rank in its category is...1+3 year=20-22...5 years=15. Not too shabby for AUM=124 Billion. PIMIX has much high securitized and lower HY+EM bonds.
Derivative is a complicated subject and difficult to quantify. But, because the ER=0.50/0.51, I think the leverage is very low.
In the past, I posted about RCTIX as a good "cleaner" securitized with better LT risk/reward, see 3 year chart(https://schrts.co/kCDynyVs)
There is a new kid in town...PYLD=Pimco Multisector Bond Active Exchange-Traded Fund. See (https://www.pimco.com/en-us/investments/etf/multisector-bond-active-exchange-traded-fund). Strategy: The Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in a multi-sector portfolio of Fixed Income Instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.
ER=0.55. See below its holdings...mmm... definitely unique.
The “sell bonds” mantra here and elsewhere (which I think is overdone) pertains mainly to interest-rate sensitive bonds. It is based on a belief that interest rates will continue going up. High yield has other attributes and is less prone (but not immune) to interest rate risk. That’s not to say high yield is less risky; just that the risks are different from what we normally call “bonds.” Would really love to hear @Junkster’s take on your question. He’s the expert on HY.