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Hi all - I'm looking for a mutual fund that has some foreign bond exposure without being a straight overseas bond play. I would like some exposure without all the volatility that comes with it. I've been looking at world bond funds as well as balanced/asset allocation funds. One fund that pops up is PBGAX (load waived). Do you have any other suggestions? Thanks in advance.
from M* ...And the fund's policy of hedging most of its overseas currency exposure back to the dollar has made it one of the least volatile in the world-bond category....
At the end of last year RPSIX had north of 20% invested in two of Price's international bond funds. M* only gives it 3 stars, but the fund's a solid 4 in my book (highly subjective of course), and I own it. If you're in a more daring or "unorthodox" frame of mind, consider PRPFX - not so much for bond exposure as for foreign currency exposure, namely the Swiss Franc. FWIW
Reply to @hank: I was looking at more esoteric stuff (especially given the mention of PGBAX - one of the most "intriguing" funds I've seen in a long time - will have to read further). But I really like your suggestion of RPSIX.
Fine, low cost fund from an excellent family. No need to defend it - it offers a conservative option for people interested in broad income exposure (including a dab of dividend paying stocks). A low standard deviation (relative to its category) seems to satisfy willmatt's requirement, too.
As of Sept 30th, it still has about 20% allocated to TRP's Emerging Market Bond and International Bond funds. But that's not the only source of its foreign bond exposure. New Income's portfolio is about 1/8 foreign bonds. Not sure where the rest of the foreign bond exposure comes from, but according to TRP, as of Sept 30th, 29.9% of the fund is in foreign bonds. This roughly matches M*'s estimate that 2/3 of its bonds are in the US.
Finally, FWIW (which I take to be pretty little), M* rates it a silver.
Reply to @msf: Thanks for the added information. My initial take was (regrettably) a quick "on the way out the door" peek at the holdings. Appreciate your more focused look. I'm a tad bit skeptical of its hold in PRFDX after that fund's poor showing during the '07-'09 mess, but am willing to overlook that in deference to the many other positives, several of which you mention. Thanks again.
Reply to @hank: Speaking of Price's International bond fund, what is the deal with it? Currently, it is rated 3 stars and a neutral rating by M*. It's long term record isn't very impressive.
Reply to @willmatt72: Thanks for the question. I've used RPIBX only sparingly in the past and currently hold only Oppenheimer's OIBAX in that segment, which I think is the better fund. Yes - lackluster performance as you say
Let me guess: (1) Price's fixed income funds weren't very good up until around 2004 or 2005 when Mary Miller became head of their fixed Income division. (She has since left for a position at Treasury.) Apparently, Mary's positive influence somehow escaped this fund. (2) Price's foreign investing over the years hasn't been a strong suite either, and that may have impacted this fund. (3) RPIBX holds little, if any, in lower quality and EM debt, sticking pretty much with investment grade paper. In the past this resulted in its lagging funds like OIBAX, which holds a sizable chunk of such debt. While it's true EMs have suffered this year, higher quality paper in interntional markets hasn't escaped damage either as the Dollar soared against major world currencies - a consequence of rising rates at home and falling rates abroad (especially in the developed nations of Europe where RPIBX has significant holdings.) Higher credit quality tends to increase a bond's sensitivity to interest rates and currency fluctuations.
Those are my three best guesses as to what's going on there. It's likely some combination of all three. Let me say: I'd never expect RPIBX to be a sector leader, mainly because Price is a conservative house who generally won't play games to enhance returns in its fixed income funds (an area where additional risks are often taken in search of yield). Nonetheless, I would expect RPIBX to rank somewhere among the top 25% - 35% of its peers - which it presently does not. And all this said, I still recommend Spectrum Income (RPSIX) as a very good fund that might meet your needs. Price seems to excell at making allocation decisions. And the other international income fund it holds, PREMX, is generally very well regarded.
Reply to @MaxBialystock: I'm trying to stay away from a straight EM Bond fund - too volatile for me. I don't need the added volatility in my portfolio. That's why I was leaning toward a world bond fund with possibly a small stake in EM. Any thoughts on CAPAX ? That's another fund that I spotted recently in a search.
Reply to @MaxBialystock: I think it's M* that says it's a "world" bond fund; I don't think they have categories for foreign regional bond funds.
Willmatt, it's not an EM bond fund either ... Asia includes a slug of developed markets/economies too, and those are strongly represented in the broadly invested Matthews funds, including MAINX.
Reply to @hank: I bought and sold RPIBX several years ago, before the crash, based on the strength of the euro. It was so heavily invested in developed-market, low-yielding, higher quality investment-grade debt that the currency movements totally overwhelmed the meager yield and were the only real driver of returns. As a bond investment, I came to the conclusion that it was not for me.
I also used to own RPSIX when I had $ at Price, and the one thing I'd add is not to assume that there will ever be significant adjustments made to the percentages of the constituent funds in the portfolio based on value or market conditions; it's one of those that stakes out a neutral position and pretty much holds to it come hell or high water, adjusting a max of a couple of percent around the neutral position. IMHO, that's just a fact of life with funds-of-funds.
Reply to @TSP_Transfer: I like the looks of TGMEX so far, too. Right, their commentary is really detailed on both fund positioning and investment environment.
I looked up GBOAX (also load-waived at Fido), and it looks like an interesting global fund. Looks to be pretty actively managed, & not that they're especially comparable, but it did better than MAINX during the taper tantrum.
Yes, it seems that I've been finding several intriguing funds since Fidelity decided to waive the loads on many of them. The problem is, I don't know which one(s) to choose. LOL
Reply to @willmatt72: I know. They opened up a whole new opportunity set, and once you get to looking at all the options, it looks like a whole new ballgame.
Comments
36% U.S.
from M*
...And the fund's policy of hedging most of its overseas currency exposure back to the dollar has made it one of the least volatile in the world-bond category....
http://www.mutualfundobserver.com/discussions-3/#/discussion/8850/loomis-sayles-global-bond
Fine, low cost fund from an excellent family. No need to defend it - it offers a conservative option for people interested in broad income exposure (including a dab of dividend paying stocks). A low standard deviation (relative to its category) seems to satisfy willmatt's requirement, too.
As of Sept 30th, it still has about 20% allocated to TRP's Emerging Market Bond and International Bond funds. But that's not the only source of its foreign bond exposure. New Income's portfolio is about 1/8 foreign bonds. Not sure where the rest of the foreign bond exposure comes from, but according to TRP, as of Sept 30th, 29.9% of the fund is in foreign bonds. This roughly matches M*'s estimate that 2/3 of its bonds are in the US.
Finally, FWIW (which I take to be pretty little), M* rates it a silver.
Relatively new fund from TCW. Sister fund (TGIEX) has top 15% performance record dating back 15 yrs in EM Bond space. TGMEX Oct.31 portfolio:30% EM bonds,66% EM equity,4% cash.And a thorough quarterly report expressing their views and outlook.
https://www.tcw.com/News_and_Commentary/Product_Commentary/TCW_Funds/Emerging_Markets_Multi-Asset_Opportunities.aspx
For your further review, with a shout out to Ted !
http://www.marketwatch.com/tools/mutual-fund/screener?FundType=8&FundValue=0&ReturnFundPeriod=11
Let me guess: (1) Price's fixed income funds weren't very good up until around 2004 or 2005 when Mary Miller became head of their fixed Income division. (She has since left for a position at Treasury.) Apparently, Mary's positive influence somehow escaped this fund. (2) Price's foreign investing over the years hasn't been a strong suite either, and that may have impacted this fund. (3) RPIBX holds little, if any, in lower quality and EM debt, sticking pretty much with investment grade paper. In the past this resulted in its lagging funds like OIBAX, which holds a sizable chunk of such debt. While it's true EMs have suffered this year, higher quality paper in interntional markets hasn't escaped damage either as the Dollar soared against major world currencies - a consequence of rising rates at home and falling rates abroad (especially in the developed nations of Europe where RPIBX has significant holdings.) Higher credit quality tends to increase a bond's sensitivity to interest rates and currency fluctuations.
Those are my three best guesses as to what's going on there. It's likely some combination of all three. Let me say: I'd never expect RPIBX to be a sector leader, mainly because Price is a conservative house who generally won't play games to enhance returns in its fixed income funds (an area where additional risks are often taken in search of yield). Nonetheless, I would expect RPIBX to rank somewhere among the top 25% - 35% of its peers - which it presently does not. And all this said, I still recommend Spectrum Income (RPSIX) as a very good fund that might meet your needs. Price seems to excell at making allocation decisions. And the other international income fund it holds, PREMX, is generally very well regarded.
Willmatt, it's not an EM bond fund either ... Asia includes a slug of developed markets/economies too, and those are strongly represented in the broadly invested Matthews funds, including MAINX.
I also used to own RPSIX when I had $ at Price, and the one thing I'd add is not to assume that there will ever be significant adjustments made to the percentages of the constituent funds in the portfolio based on value or market conditions; it's one of those that stakes out a neutral position and pretty much holds to it come hell or high water, adjusting a max of a couple of percent around the neutral position. IMHO, that's just a fact of life with funds-of-funds.