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PIMIX and IOFIX versus PDI and PCI

finder
edited June 2017 in Off-Topic
There were many discussions of some of the most profitable bond funds PIMIX and IOFIX, one of which (PIMIX) was remarkably stable over many years. But the same people who made PIMIX so good are also responsible for PIMCO closed-end funds PDI and PCI. I believe that these funds have similar strategy, but they are much smaller, so they can be nimble, and they grow twice as fast. Is there any reason they are not often mentioned in our discussion, apart for the formal reason that they are closed-end funds? Does it make them much more risky? PCI trades at a slight discount, whereas many other PIMCO closed-end funds trade at big premium. These two funds dominate the bond part of the Income ETF portfolio of the M*. What do they see in PDI and PCI that others are missing? I have a substantial part of my bond portfolio in these two funds, and so far I am very happy about them, but I am trying to figure out whether I should add to PDI and PCI, or invest in PIMIX and IOFIX instead?

Comments

  • TedTed
    @finder: I prefer the open-ended fund PIMIX, there's nothing wrong with either PDI or PCI as long as you understand that many CEF's employ leverage to attain higher returns.
    Regards,
    Ted
  • finder
    edited June 2017
    Thank you, Ted. Looking at M*, I see that PIMIX is 191.36% long and 39.90% short in bonds, so it is net 151.46% long in bonds, and 52% short in cash. In this sense, it seems that it is pretty aggressively leveraged.
  • expatsp
    @davidrmoran, do you have any thoughts on PIMIX v PDI? PDI's expense ratio (even excluding interest payments) is a bit shocking... but I like its small asset size and performance.
  • MikeMMikeM
    I don't know if strategy between PDI and PIMIX is similar, but just looking at trends on a chart, it looks like one (PDI) is much much more volatile. So if similar in strategy, the implementation of the strategy must definitely be different. Though over-all return looks good, PDI looks to erratic for my core holding taste.
    .
  • davidrmorandavidrmoran
    edited June 2017
    @expatsp
    For sure I have no smart or even particularly informed thoughts. I own both. Indeed, I just sold some brokerage PONDX for cashflow, but then sold more in rollover ira in order to buy PDI and PTY. Large-ish sums, for me. All are leveraged, yes, while PONDX is less aggressive and risky than the cefs, both of which also are now risen to trade at quite the premium to their value. So I will be unhappy with slumps and kick myself for not being in FSICX or even FTBFX instead (or AOK).
    Otoh, I think very highly of Ivascyn and am trusting him to savvily manage fast-growing bond entities in this environment.
    Doubtless you know all of this, and probably more. Others here have delved into their holdings and workings. When researching all this in my lazy way, I cast aside PCI, forget why. Someone posted a useful (but not deeply so) link to all of these Pimco etfs and cefs.
    Don't much care about ERs, unless egregious.
  • carew388carew388
    IIRC the strategy is to never buy a CEF at a premium. I seem to remember there were CEF newsletters recommending buy and sell points for CEF's but I never tracked the newsletters.
  • BenWPBenWP
    CEFs are more work than OEFs and one never can be sure if volatility is due to underlying holdings changing value or whether some large holder dumped or bought shares. When the rats jump ship, they don't even send a tweet before leaping. In my limited experience with CEFs, discounts/premiums are not very rational and they persist longer than reasonable. IOW, buying at a discount does not mean the discount will disappear, even if one believes in reversion to mean. Some funds have traded at double-digit discounts their entire lives. A subscription to Herzfeld's newsletter is one way to get advice about trading CEFs; it's not cheap and the costs of trading and making bad trades are not always accounted for.
  • davidrmorandavidrmoran
    Strategy sounds fine unless one simply wants to own that cef. Like paying a fee of some sort. Do I want to own it or not?
    Not only do discounts persist unreasonably, but so do premiums, I read. Both conditions have obtained for PDI.
    I once (long ago) owned a CE equity fund of some sort, perhaps something preferred, and no matter what I read I could not really fathom why it would not rise to its holdings' value.
  • JunksterJunkster
    IOFIX not unknown any longer as it's now on stock charts.com. Am paring back today and then go from there. We just had two consecutive daily declines (excluding ex dividends days). A first for the year. Will be hiking in some off the beaten path places in Nevada the next few months. I lived there 16 years when I was younger and although I hiked a lot still missed many wilderness areas being too busy trying to make money. Just hope my 70 year old body can still do what it did 30 years ago. The mountains out west are a whole lot tougher than the mountains of NC. Good luck to all and will check back in the fall.
  • djchappy
    edited June 2017
    @Junkster Enjoy and take care! I put in the request on stock charts. Next day it was there. Pretty easy actually.
  • Mona
    Hi Junker,

    Have a great time!

    Best Regards,

    Mona
  • finder
    @Junkster Your comments on bond funds always are important for me! So you are leaving IOFIX because of a rather small decline during two days, or because it is known? Of course PIMIX is much more known. My impression was that IOFIX momentum is only growing, but then again, I am not a bond expert, and following it from Nevada would take all fun from the trip! Good luck:)
  • catch22catch22
    Howdy @djchappy
    You noted, relative to IOFIX: " I put in the request on stock charts. Next day it was there. Pretty easy actually."
    The StockCharts inclusion for fund tickers is at least 2 years of data, unless they have changed the policy. They may also take requests for shorter time frames.....I've never tried to contact them about this.
    I posted a IOFIX chart on June 23, but this would cover the 2 year period, as IOFIX inception is listed as May 28, 2015
    Regards,
    Catch
  • JunksterJunkster
    finder said:

    @Junkster Your comments on bond funds always are important for me! So you are leaving IOkFIX because of a rather small decline during two days, or because it is known? Of course PIMIX is much more known. My impression was that IOFIX momentum is only growing, but then again, I am not a bond expert, and following it from Nevada would take all fun from the trip! Good luck:)

    No, not leaving, at least yet, just paring back. As for momentum, I must be slipping in retirement and wondering why I never built positions in preferreds ala CPXIX and the like.


  • djchappy
    Good to know @ catch22. Thanks. Tell you the truth, only reason for putting the request in on stockcharts is yahoo has been frustrating lately for charts/data/etc.
  • finder
    @Junkster Wow, I should explore CPXIX, looks quite impressive. On the other hand if you make its plot since inception using M*, it nearly exactly coincides with the one by PIMIX, but PIMIX offered smoother ride.
  • lanternlandlanternland
    Junkster - re hiking remote parts of Nevada:. Interesting book: the man from the cave by Colin Fletcher. I've been out there too.
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