PIMCO All Asset All Authority PAUDX/PAUIX has managed to lose almost 1% ytd. Earlier this year Morningstar (which is usually too kind to funds IMHO) wrote that they thought it had gotten too big to be nimble & pointed out that, with its sister fund PAAIX, the Arnott funds account for more than 3/4 of the assets in PIMCO's Floating Rate and Emerging Markets Currency funds. I'm also uncomfortable with the opacity of these Arnott funds, not to mention 6 months of doing worse than money in the bank. Any thoughts?
Comments
http://investments.pimco.com/Pages/Default.aspx
Bottom line, PAUIX is a "go anywhere" fund and he does just that. I think this fund is best suited to the long term investor.
Personally I tend to look a bit more than All Asset than at All Asset All Authority, just because I'm not a great fan of leverage. My general observations are that (1) All Asset often posts returns dramatically out of step with its peers - it's not unusual to see if lead or trail its peers by 300-400 bps in a single quarter, (2) it's not unusual for the fund to lag its peers for two or three consecutive quarters, (3) the fund has generally outperformed dramatically in quarters where its peers are in the red - which hasn't occurred since 2Q2012, and (4) the fund generally captures 75-85% of the market's upside and lags noticeably during meltups.
All Asset is up 2%, All Asset All Authority is down 1%, YTD on "D" shares through 5/24. Presumably that's from applying leverage in the wrong place, at least from the prospect of short-term returns. But, as Bitzer notes, it's not designed to be a short-term holding so I'm not sure that it's meaningful to judge it on short-term results unless you see something troubling which is leading to those results. The danged thing certainly is huge (some would say "bloated") and hence not nimble (some would say "waddling") but it's not immediately clear to me what nimble action Arnott should have taken that he didn't or couldn't.
Just pondering on a gray day.
David
He's either early on the bet and it could work out for him, or it could be subpar returns for the remainder of the year.
Imho, Arnott no longer has the same "go anywhere" ability he's had in the past: he just has too much in AUM for a fund of the sponsoring family's funds, which typically transition to being huggers of a 'neutral' position as they grow to large AUM.
I do invest in PONDX which is one component of PAUDX. In fact, PONDX or rather its institutional version PIMIX has contributed a lot to PAUDX.
I personally like the simple and successful strategy of VWINX or GLRBX.
I sold my position in PAUIX over a year ago as there are more attractive options. Among world allocation funds with an equity bias, I continue to like TIBIX, PQIIX, SGIIX/SGENX.lw, LSWWX and TZINX. Among world allocation funds with a fixed income bias, I continue to like PGDIX and JNBSX.
Kevin
To Investor's point, let's trust that his "3-D Hurricane" thesis, where he warns against US debt, deficit, and aging demographics, remains an analytical justification for his tactical investment allocations and does not become a stubborn campaign about economic policy.
Mr. Arnott has been at this a pretty long time and his success, as measured by AUM, comes in spite of his stated objective to be an alternative "Third Pillar" vehicle to pure equity/bond mix.
PAAIX has only infrequently been US equity heavy. Pretty much missed the current bull completely. Here is allocation mix since 2002:
The approach:
As David points out, PAAIX is only modestly correlated with market. Its secondary benchmark is consumer price index +5%.
NumberGal already noted its poor short-term performance:
But long-term, hard not to be impressed:
As for the PIMCO house...under siege lately. A test for sure. I wonder if it's missing the influence of Mr. McCulley.
After he retired from PIMCO, his look has changed as well. His hair may have turned silver but the roots are strong. I envy him even though I am much younger.
Some of his recent Wealthtrack appearances:
2011:
2012: