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PRFRX (mentioned in the Investor Place thing) looks like the retail version of RPIFX. Eh? Glad to see it is the top holding in my own holding, PRSNX, at 6.78% of that fund's portfolio.
"American paychecks are growing, we’re getting close to full employment, inflation data is where the Fed wants it to be, oil prices have stabilized and the U.S. dollar has stopped appreciating."
I guess a few weeks means everything is good? I don't agree with pay checks growing. The writer appears to have a very short memory.
John, I think they do look promising from the viewpoint of their lack of sensitivity to interest rate increases. For example, the fund below has a duration of 0.40 years.
T. Rowe Price Floating Rate PRFRX
However, look at the credit quality. So if the economy does well, they probably do well. If we have negative surprises and the economy does quite poorly.........that's a different matter entirely.
>>>>However, look at the credit quality. So if the economy does well, they probably do well. If we have negative surprises and the economy does quite poorly.........that's a different matter entirely.<<<<<<
Very good point Robert. My fear is 2015 will be the year of nowhere to hide in Bondville. Subject to daily changes, I am now around 30% bank loan with the rest in junk corp. Had been heavier in the bank loan. But more often than not the bank loan funds have been tracking the corp junk. Albeit corp junk has been a tad more stellar YTD. And I can think of a 1001 bank loan funds better than PRFRX.
I worry that people invest in things that they don't fully understand, though Junkster can explain the mechanics and risks of bank loans better than I.
Regarding PRFRX and RPIFX - they have the same manager and their portfolios are somewhat similar, but not so close that I'd call them clones; they certainly are not different share classes of the same portfolio.
With respect to the "three best bond funds" - I concur with John Bogle that the US Aggregate Bond Index (and funds that track it) are too heavily weighted in treasuries. If you want an intermediate term fund, I might go with VFICX instead - fewer treasuries, shorter duration, higher SEC yield, with the tradeoff being higher risk (fewer treasuries). Still, about 80% A (or better) rated bonds.
Comments
"American paychecks are growing, we’re getting close to full employment, inflation data is where the Fed wants it to be, oil prices have stabilized and the U.S. dollar has stopped appreciating."
I guess a few weeks means everything is good? I don't agree with pay checks growing. The writer appears to have a very short memory.
The floating rate funds do look promising.
T. Rowe Price Floating Rate PRFRX
However, look at the credit quality.
So if the economy does well, they probably do well.
If we have negative surprises and the economy does quite poorly.........that's a different matter entirely.
So if the economy does well, they probably do well.
If we have negative surprises and the economy does quite poorly.........that's a different matter entirely.<<<<<<
Very good point Robert. My fear is 2015 will be the year of nowhere to hide in Bondville. Subject to daily changes, I am now around 30% bank loan with the rest in junk corp. Had been heavier in the bank loan. But more often than not the bank loan funds have been tracking the corp junk. Albeit corp junk has been a tad more stellar YTD. And I can think of a 1001 bank loan funds better than PRFRX.
Here's a good, current (Feb 2015) column from Schwab describing some of the risks involved. It includes a graphic on default rates illustrating Junkster's point that bank loans closely track junk bonds.
http://www.schwab.com/public/schwab/nn/articles/Things-You-Should-Know-About-Bank-Loan-Funds
Regarding PRFRX and RPIFX - they have the same manager and their portfolios are somewhat similar, but not so close that I'd call them clones; they certainly are not different share classes of the same portfolio.
With respect to the "three best bond funds" - I concur with John Bogle that the US Aggregate Bond Index (and funds that track it) are too heavily weighted in treasuries. If you want an intermediate term fund, I might go with VFICX instead - fewer treasuries, shorter duration, higher SEC yield, with the tradeoff being higher risk (fewer treasuries). Still, about 80% A (or better) rated bonds.