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Thanks for the tip on JNBSX. I'll take a look. In addition, I thought I'd look at BAICX. I most likely will continue to hold All Asset (PASAX) through September and if it has not yet made an upward turn most likely it will be history. Three quarters I'd think is ample time to "right a ship" so to speak in today's investment environment.
Reply to @ducrow: I think my issue with PGMDX is that I am curious how much El-Erian actually manages the fund and whether or not his name was largely for marketing.
I have been looking at JNBAX this evening and running Ben's analysis on it. I was leaning somewhat towards BAICX but like more of what I see in JNBAX. One of the things that concerns me is that PAUAX has given up just about as much this year (-6.04%) as it did in all of 2008 (-7.54%).
Oh well, go figure, its manager has just missed positioning it thus far this year so it would be catching the faster market currents.
My approach is that I pick funds based on what goals I want them to achieve. I get rid of funds when either I change my goals or they fail to meet those goals.
PAUIX is basically a bet against inflation. This is pretty clear from PAUIX's benchmark and from Arnott's many, many commentaries.
PAUIX is down 7% for the year. Vanguard's TIPS fund VIPSX is down over 8%. To me, PAUIX is still performing "as expected" given the goal that I had set out for it. If some folks had a different goal for PAUIX (e.g. absolute return in any economic environment) then I can see how they might not be so happy with it -- but then maybe they didn't quite understand the purpose of the fund.
@claimui - My thought on PAUIX is that perhaps the worst is over. Since a number of investors seem to be running for the exits, maybe I'll stay in and see what happens. (from another posting, just a few minutes ago). May I ask what might be a foolish question? When you say that PAUIX is a bet against inflation, do you mean that you aren't expecting inflation or that you are and trying to "hedge" against the impact that inflation might have on your overall portfolio?
@vintage freak - Sorry I'm using PAUIX and PAUDX interchangeably in this forum, but I'm just following what's used in the thread in question.
Reply to @Bitzer: Sorry if I was unclear. I hold PAUIX and its role in my portfolio is partly as an inflation hedge, and partly as a diversified bond holding. Since both bonds (especially emerging market bonds) and inflation hedges have done poorly this year, I don't have a problem with PAUIX based on its role in my portfolio. However, I do think some people might have wanted PAUIX to be a "market neutral" or "absolute return" fund and those folks would be understandably disappointed.
Reply to @ducrow: please note that the income % of JNBSX might temporarily suffer as the PMs are very sensitive to total return which they want to protect. so if you compare this to other income builders, some might offer higher yield today, but this would be at the expense of over-allocating to asset classes which are losing favor with the masses (such as credit, long duration, reits).
All Asset and All Authority were up yesterday (One day does not make a turn-a-round but it has to start somewhere). Perhaps they are starting to find traction. I indeed hope so.
I know I have been accused by some colleagues as too quick to pull the trigger on a manager, but some of this discussion is mind numbing. The way we look at it, alternative/flexible mandate/go anywhere funds will sometimes differ greatly from what is popular. All of us should know by now that ALL good managers have periods of 1-3 years when they simply are not near the top, sometimes near the bottom. PAUDX/PAUIX is down under 7% for the year, and folks are dumping it?
As another poster noted, the fund's goal is CPI plus 6.5% over a full market cycle. That's hardly one year, more like five years. Perhaps some people did not read the fund's prospectus? It's pretty clear what the manager of the fund wants to accomplish. If you look at how the fund has adjusted its allocation over the years, there have in fact been some very big adjustments.
I would urge FA folks to remember that the 'world allocation' asset class is something that Morningstar invented so they would have a place to stick all of the funds that don't fit into one of their other boxes. PAUIX, TIBIX, IVAEX, MALOX, TZINX, PAAIX, and a host of others have very little in common, but that does not stop M* from rating them together. Throw out the star ratings, throw out the analyst ratings. Read the fund prospectus and as much of the other official fund material as you can. Go to the fund web site and listen to any conference calls or manager presentations. THEN decide if the manager(s) are the folks you want to hire. But give them time to do what they say their goals are.
If an investor wants PAUIX to be an absolute return vehicle, they are in the wrong place. And White Box is most definitely not an absolute return fund. Just look at the wild returns the managers have had over the strategy's history. Absolute return should be very boring, something along the line of EIGMX.
I am not defending Rob Arnott. But I am suggesting that holding this fund for 1-2 years and then dumping it because it is down a little more than 1% for the trailing 12 months, seems hasty to me. Would I like Arnott to be doing better? You bet. But if there is a market disaster, and he can do as well as he did in 2008, that is fine by me, too.
Not sure how what BobC said translates to a "Mutual funds vs ETFs" thread unless we are saying ETFs are for trading and funds are not. I do believe in trading mutual funds. Nothing wrong with that. Inconvenient but not wrong. Amco Mid Cap Growth fund for the most part deserves to be traded.
And yeah, I'm holding my PAUDX and my HSGFX and all my other funds that are sucking wind because I have my reasons to do so. To each his/her own.
Certainly many people are successful in trading mutual funds. However, others might be more successful holding a long-term managed ETF portfolio. Personally, even if it is possible for me to identify (using past performance results) a mutual fund manager who will deliver above average performance in the future, I find myself often purchasing near the end of his/her above average performance. Then, being unhappy with the sub-par performance, I'll sell the fund just before the manager starts delivering above-average performance again.
The spirited discussion in this thread illustrates this issue. Many people (including myself) purchased PAUDX based on (among other things) above-average performance. Now that short term performance has fallen off, many of us are concerned. The wide variety of suggestions above (buy, sell, sell some, hold) indicates that some of us will be correct about PAUDX and others won't. Only time will tell. Maybe index ETFs are best for some of us who are uncertain when performance falls off short term. Others, such as yourself, may be more successful at trading mutual funds than I am.
Hi, Bitzer. I was not aware this discussion was a fund vs etf thread. I thought it was about ducrow's ditching PAUDX. My comments were simply meant to stress the importance of due diligence when picking mutual funds. In this case, owners of PAUDX/PAUIX have a right to be concerned about short-term performance, but the strategy of how the manager chooses to allocate his fund's dollars has not changed at all. He uses the same global/macro overview process as he always done with this fund. His assumptions/conclusions of what he sees change, and this is reflected in the changes he makes to his allocation.
Fortunately our clients give us a break when we underperform for a year.
Active or passive? In the case of PAUDX/PAUIX there are no passive funds that attempt to do what Arnott does. For those of us with short memories, short leashes, or for those who do not know what they are getting into before they buy an active fund, passive is an ok option, for sure.
BobC, thanks for your comments. My intention was not to suggest how anyone should react to performance changes in mutual funds. Please accept my apology if my comments could be construed otherwise.
My illustration was only for the purpose of pointing out that some people (including myself) purchase funds (e.g. PAUDX, the subject of this thread) with good long term performance which then stumble. Then, people (such as many of those contributing to this thread, including myself) then are uncertain as to buy more, sell all, sell some or hold, Obviously, not all of those calls will be correct. I'm only suggesting that index ETFs might be a solution for those who prefer to avoid this confusion and possible loss of return.
I'm aware that this is not a mutual funds vs. ETFs thread. That's why I created a new thread.
I'm also aware that, for some folks in this forum, suggesting ETFs might be as popular as yelling "Go Yankees!" at Fenway Park. I'm not sure that managed ETFs are a better solution than mutual funds. That's why I value this forum, both as a reader and a contributor. But, I hope that my suggestion of ETFs as a possible solution would be accepted in the manner which it was offered: simply a discussion item with which folks may agree with, disagree, not comment, or simply ignore.
I'm not involved in higher education, but I believe they call it "academic freedom". And I thank the monitors of this forum for that indulgence.
Both All Asset and All Authority were up yesterday (9/6/2013). Back on August 27, they were also up when bonds were up and stocks were down. The difference perhaps, this time, is that bonds were flat and stocks were up. Perhaps a repositioning is taking place within the funds. Time will tell if they are finding traction. For Information, I am still with my position in PASAX. Skeeter
I'm still holding on to PAUDX and PGMDX. AQRNX and ARCNX are what I'm looking to sell. They put up the semi annual report last week. Waiting - only so long - for "commentary" for the 2nd quarter.
Reply to @Ted: Funds of Funds may or may not work. I'm sure there are good ones and bad ones and we should not count Target Allocation funds here at all. PAUDX and PGMDX while it may be a strategy, I think they can invest wherever they like. I could be wrong of course.
For the record, I own 5 PIMCO funds.
PAUDX and PGMDX in a small IRA where they make up entire account. PFSDX which is less than 3% of my main IRA PDRMX which is part of my taxable account in my "Artisan Portfolio". PTTRX in my 401k (who doesn't have this one in their 401k?)
Yesterday both bonds and stocks were up in general and emerging markets had a great day ... and, with all this, both All Asset & All Authority were up. Perhaps, they both are indeed finding some traction with thier positioning in the markets.
Comments
Thanks for the tip on JNBSX. I'll take a look. In addition, I thought I'd look at BAICX. I most likely will continue to hold All Asset (PASAX) through September and if it has not yet made an upward turn most likely it will be history. Three quarters I'd think is ample time to "right a ship" so to speak in today's investment environment.
Thanks again for the tip.
Skeeter
JNBAX has a lower minimum entry of $1000.00 NTF at Fidelity.
Maybe you have a cool million to invest in JNBSX? LOL.
CAPAX is right there with JNBAX as a good choice.
Art
Hi Art,
I have been looking at JNBAX this evening and running Ben's analysis on it. I was leaning somewhat towards BAICX but like more of what I see in JNBAX. One of the things that concerns me is that PAUAX has given up just about as much this year (-6.04%) as it did in all of 2008 (-7.54%).
Oh well, go figure, its manager has just missed positioning it thus far this year so it would be catching the faster market currents.
Skeeter
PAUIX is basically a bet against inflation. This is pretty clear from PAUIX's benchmark and from Arnott's many, many commentaries.
PAUIX is down 7% for the year. Vanguard's TIPS fund VIPSX is down over 8%. To me, PAUIX is still performing "as expected" given the goal that I had set out for it. If some folks had a different goal for PAUIX (e.g. absolute return in any economic environment) then I can see how they might not be so happy with it -- but then maybe they didn't quite understand the purpose of the fund.
@vintage freak - Sorry I'm using PAUIX and PAUDX interchangeably in this forum, but I'm just following what's used in the thread in question.
Like many, I'm trying to be patient with PAUIX, and allow Arnott to ply the waters through a full market cycle - its stated mandate:
"...the fund targets solid real returns; its secondary benchmark is CPI + 6.5% over a full market cycle."
All Asset and All Authority were up yesterday (One day does not make a turn-a-round but it has to start somewhere). Perhaps they are starting to find traction. I indeed hope so.
As another poster noted, the fund's goal is CPI plus 6.5% over a full market cycle. That's hardly one year, more like five years. Perhaps some people did not read the fund's prospectus? It's pretty clear what the manager of the fund wants to accomplish. If you look at how the fund has adjusted its allocation over the years, there have in fact been some very big adjustments.
I would urge FA folks to remember that the 'world allocation' asset class is something that Morningstar invented so they would have a place to stick all of the funds that don't fit into one of their other boxes. PAUIX, TIBIX, IVAEX, MALOX, TZINX, PAAIX, and a host of others have very little in common, but that does not stop M* from rating them together. Throw out the star ratings, throw out the analyst ratings. Read the fund prospectus and as much of the other official fund material as you can. Go to the fund web site and listen to any conference calls or manager presentations. THEN decide if the manager(s) are the folks you want to hire. But give them time to do what they say their goals are.
If an investor wants PAUIX to be an absolute return vehicle, they are in the wrong place. And White Box is most definitely not an absolute return fund. Just look at the wild returns the managers have had over the strategy's history. Absolute return should be very boring, something along the line of EIGMX.
I am not defending Rob Arnott. But I am suggesting that holding this fund for 1-2 years and then dumping it because it is down a little more than 1% for the trailing 12 months, seems hasty to me. Would I like Arnott to be doing better? You bet. But if there is a market disaster, and he can do as well as he did in 2008, that is fine by me, too.
And yeah, I'm holding my PAUDX and my HSGFX and all my other funds that are sucking wind because I have my reasons to do so. To each his/her own.
The spirited discussion in this thread illustrates this issue. Many people (including myself) purchased PAUDX based on (among other things) above-average performance. Now that short term performance has fallen off, many of us are concerned. The wide variety of suggestions above (buy, sell, sell some, hold) indicates that some of us will be correct about PAUDX and others won't. Only time will tell. Maybe index ETFs are best for some of us who are uncertain when performance falls off short term. Others, such as yourself, may be more successful at trading mutual funds than I am.
Fortunately our clients give us a break when we underperform for a year.
Active or passive? In the case of PAUDX/PAUIX there are no passive funds that attempt to do what Arnott does. For those of us with short memories, short leashes, or for those who do not know what they are getting into before they buy an active fund, passive is an ok option, for sure.
My illustration was only for the purpose of pointing out that some people (including myself) purchase funds (e.g. PAUDX, the subject of this thread) with good long term performance which then stumble. Then, people (such as many of those contributing to this thread, including myself) then are uncertain as to buy more, sell all, sell some or hold, Obviously, not all of those calls will be correct. I'm only suggesting that index ETFs might be a solution for those who prefer to avoid this confusion and possible loss of return.
I'm aware that this is not a mutual funds vs. ETFs thread. That's why I created a new thread.
I'm also aware that, for some folks in this forum, suggesting ETFs might be as popular as yelling "Go Yankees!" at Fenway Park. I'm not sure that managed ETFs are a better solution than mutual funds. That's why I value this forum, both as a reader and a contributor. But, I hope that my suggestion of ETFs as a possible solution would be accepted in the manner which it was offered: simply a discussion item with which folks may agree with, disagree, not comment, or simply ignore.
I'm not involved in higher education, but I believe they call it "academic freedom". And I thank the monitors of this forum for that indulgence.
I'm still holding on to PAUDX and PGMDX. AQRNX and ARCNX are what I'm looking to sell. They put up the semi annual report last week. Waiting - only so long - for "commentary" for the 2nd quarter.
Regards,
Ted
For the record, I own 5 PIMCO funds.
PAUDX and PGMDX in a small IRA where they make up entire account.
PFSDX which is less than 3% of my main IRA
PDRMX which is part of my taxable account in my "Artisan Portfolio".
PTTRX in my 401k (who doesn't have this one in their 401k?
Yesterday both bonds and stocks were up in general and emerging markets had a great day ... and, with all this, both All Asset & All Authority were up. Perhaps, they both are indeed finding some traction with thier positioning in the markets.
Skeeter