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OSTIX as alternative to Vanguard GNMA (VFIJX)?

randynevinrandynevin
edited July 2013 in Fund Discussions
I'm watching the effect of interest rate angst on my bond funds, and wondering about making a change. I have significant positions in 3 Vanguard funds: GNMA, intermediate tax-free (muni), and short-term corporate. The GNMA fund has lost -3.4% ytd. Duration is 4.36 years, according to Morningstar. I love the expense ratio, 0.11%.

One alternative I'm considering is Osterweis Strategic Income. If you own it, could you comment on how you like this fund? It has a short duration (2 years) and has done well (ytd=3.4%). But I worry about the expense ratio (0.91%), and the average credit quality (B), which puts it in junk bond territory.

I think I'll hold the muni fund long-term, and also the short-term fund, which has been hit only minimally so far.

Other funds I'm considering are: FFRHX (fidelity floating rate high income), PONDX (pimco income), ATOIX (alpine ultra-short tax-optimized income), but so far OSTIX is the frontrunner.

I want very short duration, and therefore minimal interest rate sensitivity. Capital preservation is important.

Comments

  • Mona
    I want very short duration, and therefore minimal interest rate sensitivity. Capital preservation is important.
    But I worry about the expense ratio (0.91%), and the average credit quality (B), which puts it in junk bond territory.
    OSTIX has credit risk which you need to think about when you say capital preservation is important to you.

    Mona



  • David_Snowball
    You might want to read the prospectus for RiverPark Strategic Income, which is not yet available for sale. It was featured in last month's "coming attractions." David Sherman is quite risk conscious and hates losing money. In conversation, he's identified OSTIX as a fund of the sort he imagines Strategic Income being.

    For what it's worth,

    David
  • ShostakovichShostakovich
    Reply to @David_Snowball: RiverPark Short Term High Yield appears to have lost a bit of money (very little, however) according to my last quarterly statement. Have you noticed this?
  • ron
    look at JASBX and VFTSX.
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