Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
FYI: Conventional wisdom says that short-term bond funds are a smart fixed-income choice in rising-interest-rate environments. Interest rates and bond prices generally move in the opposite direction, and longer maturities typically have steeper price declines than shorter ones. Regards, Ted http://investorplace.com/2014/11/best-short-term-bond-funds-fjrlx-vfstx-jshnx/print
Look at LALDX and NARAX ... both of these are short term bond funds and are kicking out a yield of 3.70% & 3.18% and both earned five stars. I have linked their M* reports below for your easy viewing.
Although I have listed the A share tickers other share classes are available for purchase.
I am currently carrying a good sum in cash (both in investment and in demand) and a good sum invested in short term bond funds. I think ones needs both plus other holdings to have a well diversified portfolio.
It appears that LALDX is also a short duration, high yield bond fund. This FIDO view, from June 30 data, also indicates a 30 day yield of 2.6%. Seperately, as note above: "Short term bonds vs Savings/checking accounts for cash"..... these are different critters for most investors I know. The "at home" local account is more of an emergency money allocation; versus short term bond funds being a parking spot as needed, that exist within a retirement account.; unrelated to a savings or checking account. Not unlike any other active managed fund, there are lots of different critters for investment style among short term bond funds; and that short term bond funds and short term gov't bond funds are indeed different critters, eh?
Thanks for your perspectives ... and, calling attention to my goof with THIFX, much appreciated (now corrected).
Starting to get cold in the Carolinas. Monday night it was 26 at the airport and 33 at my home in the city. Last night I am showing a low of 42. Not sure what the reading was at the airport. Heck, Monday in Columbia, SC they had an accumulation of a little snow ... just enough to make driving difficult.
I agree about the loads. We don't hold the fund mentioned; but Fidelity does have "load waived" access to a number of funds, that could be future considerations. I recall, too; that "Skeet" has previously mentioned that he may purchase funds without load. Take care, Catch
I agree, no doubt some folks get turned off by a sales load. But, once paid they are usually free to move around within that family of funds to other funds, through nav exchanges, without paying another sales load.
One of the best ways I have found to manage the sales load, for a small retail investor, is to buy a fund family’s bond fund which usually has a smaller sales load than their equity funds and then do a nav exchange later into the equity position. You might check on this in more detail if you are interested as usually there are certain required holding periods and a limit as to how often you can do nav exchanges among funds.
I like holding all of my investments with one broker and in this way come tax time I get one consolidated 1099 statement for all my investment positions within my taxable account. If I held them split among a few fund houses or split among a couple of brokers then my accountant would have to generate a consolidated 1099 spread sheet as a part to filing my tax return. I figure, what I pay in mutual fund sales commissions that get spread over many years is a savings over having to pay my accountant annually to compile a consolidated 1099 spread sheet plus there are other things to consider.
Old_Skeet
Additional comment. I have owned both NARAX and PGUAX, each from time-to-time. I currently own PGUAX and if I chose I could move to NARAX commission free through the nav exchange program and then once parked in NARAX, I believe for 90 days, I could move back to PGUAX. The nav exchange program is one way I have found to move from fixed income to equity to play seasonal strategies without paying a sales load. And, the bookeeping is maintained by the broker's back office through sending out the account's 1099 Form which details all the account's transactions, etc. The one 1099 Form has certaintly reduced the hassels I generally have to deal with come tax time vs. many.
For those interested I have linked the M* report for PGUAX below. Notice its nice dividend of better than 4.25%.
Take a look at OSTIX...similar holdings...shorter duration...better results: They both seem to be Short Term High Yield funds, yet M* doesn't categorizes them that way. THOPX is a 5* fund in the ST Bond category and OSTIX is a 1* fund in the HY category.
Bee, THOPX is ~ 90% investment grade (mostly BBB) and OSTIX is more than 90% non-investment grade; I don't think you can call those similar holdings. Making a choice between them involves a portfolio allocation decision.
Bee, THOPX is ~ 90% investment grade (mostly BBB) and OSTIX is more than 90% non-investment grade; I don't think you can call those similar holdings. Making a choice between them involves a portfolio allocation decision.
Your correct with respect to credit risk. I guess my point has to do with overall risk/reward. I'm impressed with both funds overall performance. These are managed bond funds so I am sure both fund's bond holdings have changed over these 11 years.
Finding bond fund managers who can navigate both credit risk and interest rate risk along with market risks will serve an investor well. OSTIX gets my nod for managing both risk and reward along with its impressive performance in 2008-2009 (market risk).
Bee, THOPX is ~ 90% investment grade (mostly BBB) and OSTIX is more than 90% non-investment grade; I don't think you can call those similar holdings. Making a choice between them involves a portfolio allocation decision.
Yes but do we know historically if that was the case. When I look at the 2008 drop of both funds it would seem the reverse would have been true. Either way, looking at the chart should give everyone pause. There's a reason PTTRX has a reputation. It didn't drop like that in 2008.
Comments
Look at LALDX and NARAX ... both of these are short term bond funds and are kicking out a yield of 3.70% & 3.18% and both earned five stars. I have linked their M* reports below for your easy viewing.
http://quotes.morningstar.com/fund/f?t=LALDX®ion=USA
http://quotes.morningstar.com/fund/f?t=NARAX®ion=USA
In addition, you might wish to look at THIFX as it sports a 2.16% yield and has also earned five stars.
http://quotes.morningstar.com/fund/thifx/f?t=thifx
Although I have listed the A share tickers other share classes are available for purchase.
I am currently carrying a good sum in cash (both in investment and in demand) and a good sum invested in short term bond funds. I think ones needs both plus other holdings to have a well diversified portfolio.
Old_Skeet
It appears that LALDX is also a short duration, high yield bond fund. This FIDO view, from June 30 data, also indicates a 30 day yield of 2.6%.
Seperately, as note above: "Short term bonds vs Savings/checking accounts for cash"..... these are different critters for most investors I know. The "at home" local account is more of an emergency money allocation; versus short term bond funds being a parking spot as needed, that exist within a retirement account.; unrelated to a savings or checking account.
Not unlike any other active managed fund, there are lots of different critters for investment style among short term bond funds; and that short term bond funds and short term gov't bond funds are indeed different critters, eh?
M* short term bond list
An alright place for "cash" monies within retirement accounts, IMHO.
Me 2 cents worth.
Take care,
Catch
Thanks for your perspectives ... and, calling attention to my goof with THIFX, much appreciated (now corrected).
Starting to get cold in the Carolinas. Monday night it was 26 at the airport and 33 at my home in the city. Last night I am showing a low of 42. Not sure what the reading was at the airport. Heck, Monday in Columbia, SC they had an accumulation of a little snow ... just enough to make driving difficult.
Take care,
Old_Skeet
I agree about the loads. We don't hold the fund mentioned; but Fidelity does have "load waived" access to a number of funds, that could be future considerations.
I recall, too; that "Skeet" has previously mentioned that he may purchase funds without load.
Take care,
Catch
Yep I had thought about that after I posted.
Thanks for making a comment.
I agree, no doubt some folks get turned off by a sales load. But, once paid they are usually free to move around within that family of funds to other funds, through nav exchanges, without paying another sales load.
One of the best ways I have found to manage the sales load, for a small retail investor, is to buy a fund family’s bond fund which usually has a smaller sales load than their equity funds and then do a nav exchange later into the equity position. You might check on this in more detail if you are interested as usually there are certain required holding periods and a limit as to how often you can do nav exchanges among funds.
I like holding all of my investments with one broker and in this way come tax time I get one consolidated 1099 statement for all my investment positions within my taxable account. If I held them split among a few fund houses or split among a couple of brokers then my accountant would have to generate a consolidated 1099 spread sheet as a part to filing my tax return. I figure, what I pay in mutual fund sales commissions that get spread over many years is a savings over having to pay my accountant annually to compile a consolidated 1099 spread sheet plus there are other things to consider.
Old_Skeet
Additional comment. I have owned both NARAX and PGUAX, each from time-to-time. I currently own PGUAX and if I chose I could move to NARAX commission free through the nav exchange program and then once parked in NARAX, I believe for 90 days, I could move back to PGUAX. The nav exchange program is one way I have found to move from fixed income to equity to play seasonal strategies without paying a sales load. And, the bookeeping is maintained by the broker's back office through sending out the account's 1099 Form which details all the account's transactions, etc. The one 1099 Form has certaintly reduced the hassels I generally have to deal with come tax time vs. many.
For those interested I have linked the M* report for PGUAX below. Notice its nice dividend of better than 4.25%.
http://quotes.morningstar.com/fund/pguax/f?t=PGUAX
Something to perhaps think on.
Indeed a good fund ... but, not held within my deck of 52.
Old_Skeet
Nice to see your name here.
Take care of you and yours,
Catch
They both seem to be Short Term High Yield funds, yet M* doesn't categorizes them that way. THOPX is a 5* fund in the ST Bond category and OSTIX is a 1* fund in the HY category.
Finding bond fund managers who can navigate both credit risk and interest rate risk along with market risks will serve an investor well. OSTIX gets my nod for managing both risk and reward along with its impressive performance in 2008-2009 (market risk).
FWIW, it is available load-waived and w/o transaction fee at TDAmeritrade.
Short term bonds vs Savings/checking accounts for cash..the difference is like 1% and no safety....are they worth it?
I also completely agree, with a difference as small as 1%. A bit more than that, it does become a consideration.