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Bond mutual funds analysis act 2 !!



  • edited March 2020
    ANGLX joined the party of "LOW SD SECURITIZED" category when it lost -3.6% today.   From the high(or pretty close to it) on March 4th, SEMMX lost 16+%...ANGLX 14+%...VCFAX close to 14%....IOFIX over 42%...DPFNX 19%...DHEAX 8.5...PMZIX 17%...BDKAX over 60%

    The SAGA of securitized isn't over yet
  • OMG. There will be a focus on fixing pricing mechanisms and/or imposing holdings regulations in future with fixed income, but we need to get through this crisis first.
  • Glad I sold BDKAX months ago and ANGLX DPFNX and PMZAX a week or ago. Still hold DHEAX and SEMRX because of Schwab short-term transaction fee, but at this rate may have to sell those as well.
  • I think right now Munis would be my highest bond conviction asset and why I'm invested in them in at a very high %. There was a lot of carnage but the Fed is supporting treasuries and Munis.

    I don't want to be in treasuries which relate to rates

    Don't want HY which correlates to stocks.

    Corp bonds are going up too but harder to figure out because they go from junk to high-rated but...are high-rated bonds really high when the company is in trouble.

    Munis may be OK no matter what rates or stocks are doing. The Muni ETF and funds are exploding up for several days.

    MBS/securitized is untouchable such as VCFAX,SEMMX,IOFIX,even DHEAX lost a lot

    Multi can be another option if you don't know what to do.

    PIMIX looks OK but PDIIX rebound is better + AUM is smaller + much more diversified
  • PTIAX is down YTD by less that 4% now. What's THEIR secret sauce?
  • edited March 2020
    According to M* PTIAX is invested mainly in MBS/Securitized + Munis. They have over 70% in IG (investment grade) bond rating.
  • Isn't this bond crash just a misallocation of capital? In reality, those who bought into bond funds that crashed hard took on bad debt, the conduit being the fund itself.

    FD, several weeks ago, I commented on the investing principle of Taleb's or Bodie's black swan investing approach...85-90% of funds invested in the safest investment possible, the balance invested aggressively...I think that style has worked well and will continue to work well going forward. To the point you made then and for certain, one would have made greater gains over the past decade but then again the best gains can be made by compounding wealth, limiting drawdowns.

    Not sure that I would touch Muni bonds here...recognizing there are many different types of muni bonds, I can't see folks buying new cars going forward, don't see how muni's can raise property taxes, folks will just stop paying them, local shops are going to be slow to ramp back up if at all, can only write so many parking tickets...and is counting on the gov't to fund/backstop an investment really investing or is it smart to do so, meaning having the wind at your back, kind of like front running the POMO (published permanent open market operations) in prior QE programs?

    Good luck and good health to all,

    Baseball Fan

  • @FD1000 what muni funds are your highest conviction investments right now? Thanks for sharing your thoughts
  • We all have a different style and goals so it's difficult to recommend but look at my first post. I usually don't invest in a "pure" Muni but in HY munis to get more performance but it's riskier too.

    HY Munis
    • PHMIX
    • NHMAX
    • MMHAX
    • OPTAX
    • ORNAX
    • GHYAX
    • GWMEX... (IG Munis but BBB+A rating)
    • NVHAX.... (ST duration HY Munis-lower SD than the above)
  • When I think of Municipal bond funds, I think of AndyJ. I have not seen him post in quite a while. Does anyone have any information?

  • MikeW said:

    @FD1000 what muni funds are your highest conviction investments right now? Thanks for sharing your thoughts

    PTIMX Performance Trust. Almost back to flat for the year. Best I've seen. The standard, clickable spots which let you dive deeper, to see more granular detail at Morningstar seem not to be working properly, Saturday, late morning, here.
  • @FD1000 and @Crash. Thx for sharing.
  • edited March 2020
    PTIMX YTD=0.1%....BMBSX YTD=0.5% and its bond rating is much higher.
    For 1-3 years PTIMX has better performance.
    It depends on what you try to achieve.
  • Not much talk about tax loss harvesting, but I did just that last week by selling PTIMX.

    I'll now look at BMBSX as a replacement during the 30 day wash period.

    Investors who manage taxable investments should have a list of similar funds for just this purpose.

    Thanks for pairing these funds @FD1000.
  • Completely agree bee. I’ve done a little myself
  • edited March 2020
    @bee@mcmarasco: Did you take this loss to be applied to RMD's that you took this year for tax year 2020 ? I ask as I've taken my 2020 RMD already.
  • Completely agree bee. I’ve done a little myself

    I’m not taking RMD’s, not there yet. This was done in my taxable account. In fact, most of the tax harvesting was from bond funds.
  • What a whopping day is was in HY Munis where many funds lost 0.8-1%
    I sold everything again and now at 99+% in Gov MM.
    Basically, I gave back about 50% of what I made last week. Life goes on :-)

    Don't know what happened to Munis today but this (link) has an explanation.

    But it’s important to note that bonds issued by states and localities are only part of the muni market. About two-thirds of the market is “revenue” bonds — those issued by everything from hospitals to transportation providers to colleges and universities, all of which are about to take a serious hit from a shuddering economy.

    “You could draw a dotted line from the economic impact of coronavirus to any facet of muni finance,” Kazatsky said.

    “Investors have to brace for systemic downgrades across states, cities, hospitals, transportation, even essential service utilities,” Fabian said. “You can think some pretty grim things these days. The economic data is going to turn terrible.”

    What does that mean? The municipal market is wary of sweeping predictions, like the one in 2010 by banking analyst Meredith Whitney, who warned of “a spate of municipal bond defaults,” as if state and local governments had never confronted an economic downturn before.
  • I usually do lots of research but this market volatility and unpredictability are extremly high.
    3 good funds for you TGLMX,VFIIX,ANBEX


    1) VFIIX bonds rating are higher. Both heavily in MBS.

    2) VFIIX duration=2.3 is much lower than TGLMX duration=5.8

    3) VFIIX SD is lower and especially YTD. TGLMX peak to trough in March was over 6% while VFIIX was about 2.1%.

    4) And why YTD performance is close

    So, for the unknown wild market, VFIIX looks more of a sleep better fund.


    1) ANBEX invests mostly in Gov and lower % in Corp and hardly in MBS

    2) ANBEX risk/reward is better for YTD + 1-3 years and since inception 03/2016. See PV(link) since inception

    Portfolio CAGR Stdev Best Year Worst Year Max. Drawdown Sharpe Ratio Sortino Ratio
    ANBEX 4.91% 3.14% 7.84% 0.27% -2.32% 1.12 2.29
    TGLMX 3.72% 3.43% 7.27% -0.52% -3.13% 0.7 1.27
    VFIIX 2.86% 2.18% 5.83% -0.04% -1.95% 0.7 1.1

    3) For YTD (chart) ANBEX performance is better with a lower peak to trough loss too

    4) Of course, I also like ANBEX much smaller AUM and in this market also it's much higher turnover which means the managers' skill is working and they have many years of experience prior to running this fund.
  • edited April 2020
    Any thoughts on VCFAX/VCFIX? I thought it would have held up a little better than it has.

    With rates so low, and probably staying so for a while, is this a buy, sell or hold?

    I am thinking about liquidating VCFAX/VCFIX and DCA'ing into BAGIX/BAGSX. Am I over-reacting? Is this a bad move based on the current (and hypothetical future) rate environment?

    FYI: I also own JMUIX/JMUTX

    Any and all thoughts, opinions, suggestions are very welcome!!!!

  • @mcmarasco
    The problem right now is that we are at a certain bottom but it can get worse or better which is difficult to predict. VCFAX has at least 40% in investment-grade securitized bond but 22% in the lowest level = BBB which isn't good because these have a good chance to be downgraded. So let's call it 22% in IG which isn't enough.

    On the other hand. VCFAX price/trend has improved and YTD lost close to 15%.

    The above isn't a good choice either way. My rule of thumb says that I sell any bond fund I have if it lost 3+% no matter what. I usually don't hold HY or EM(emerging market) bond fund


    BAGIX - Baird is a good shop. If I DCA I use what is called pyramid up. I never buy on the way down only up but watch the chart when you buy bond funds because prices don't change much. What does it mean pyramid up? suppose you want to DCA 4 times. You buy your first bucket, the second bucket should be above the first, the third above the second.

    But, these IG funds have another problem. They might be OK but their potential LT annual return will be around 2.5-3%. If you hold them as a ballast then you are OK but if you hold them for higher performance you will not get much.


    JMUTX is your typical Multi sector fund. It's similar to VCFAX bond rating but more diversified with MBS + Corp. All/Most of the Multi funds have the same problem I described for VCFAX.
  • FD1000, Thank you for the very insightful opinions and thoughts!

    I believe your pyramid up approach is the way to go and yes I am looking for more ballast then return at this point.

    I’m not sure what kind of return we’re going to get from bonds going forward in this low rate environment.

    Do you have any thoughts on current and future rates?
  • Rates will stay low and I intend to get better than 4% (I hope for at least 4.5-5%) from my bond funds, after all, I invest mostly in bond funds but I also trade them. Don't forget that bonds have several categories such as HY. Coming out of this mess, the best managers/funds will do much better than a simple index like BND. We have seen it already after 2009.
  • edited April 2020
    I've done all of the "tax harvesting" i can from my bond funds. I was probably a little late getting out of them, but......

    Now that it "appears" the bond markets (taxable and muni's) have calmed down, what are the thoughts, suggestions and opinions on whether or not it's time to DCA back into these investments?

    I currently hold a small position in JMUIX/JMUTX and want to invest in BAGIS/BAGSX or similar fund.

    I also looking to open a position in a HY muni such as OPTAX or GHYAX (previously owned) but am a little hesitant.

    As many have stated, rates will probably remain low for a long while, so I don't expect to get huge returns, i'm looking for a little ballast and maybe 4%. Am I too early? Too late? Too optimistic?

    Any and all input welcome!!!

  • I just looked at TRP HY. TUHYX. Down -15% ytd. Distributions are nothing to write home about, either---- given that it's supposed to be a HY fund. I owned it back in 2018 or so but got out not long afterward. It's not awful. But I continue to tout PTIAX and PRSNX. Even RPSIX, a TRP bond fund of funds, is less volatile. The HY risk you'd take seems not worth it to me, with other good options out there. Maybe go with Munis? PTIMX. Or maybe HY Munis.

  • Matt, I don't think any markets, including bonds, have calmed down. I don't see even a trend I'm excited about that I want to trade. Higher-rated funds look OK but rates might go up when things get better. We are in a black swan market and unclear forecasts. VFIIX has a very smooth slow uptrend if you want to own a fund until we see better markets (chart).

    JMUTX,BAGIX,OPTAX are good funds.

    I'm out of the market.
  • Thanks gentlemen, appreciate your thoughts!!!

    I've said this weeks ago on this and other boards and platforms regarding COVID-19 forecasts, they are, AT BEST, misleading and at worst, useless. The data that is imputed has been incomplete, skewed, unreliable and just inaccurate. This can ONLY leads to IN-KIND outcomes.

    FD (and others), what signals are you looking for in order to move back into the Bond market? Stock market?

    Obviously, none of us can predict the "bottom" so what should i be looking for?

    Thx for any and all responses!!!!

  • FWIW, one of the Wealthtrack videos bee posted keeps coming back to me about bonds. The big point was this economic recession is going to have a long after effect. Because things start to stabilize with the virus does not mean the economy can flick a switch and be back to normal. Per the video interview this fact is going to (likely) lead to more junk bonds defaulting and make many of the stable corporate bonds go to junk category. For me this means the bond market will be more volatile for quite some time. And for me, the risk reward ratio is skewed much more to the risk side now. I am eliminating bonds from my self managed portfolio as much as I can. Just my $0.02.
  • edited April 2020
    Hi @MikeM. Your thinking sounds reasonable to me. However, there is a lot of money in the system and it is not going to be happy with a 0% to 1% yield when one can make more in stocks and bonds. This is why I loaded equities in the stock market sell-off. The stock market sell-off lead to the bond market selling-off. with this, I'm now buying in the income area of my portfolio since bond prices have felt compression.

    Mike, by all means ... you might be right ... I'm not saying you are not. It is just that I'm taking a different perspective ... and, that is what makes a market.

    Take care ... and, I wish you the very best.
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