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Bond Funds

What are your suggestions for short-term bond funds and high-quality intermediate bond funds?

Comments

  • hq interm bond fund DODIX. PRTIX and TRP has a bunch of State-specific tax-free funds. CA, VA among them.
  • TedTed
    edited February 2018
    @Bobpa: Short and Intermediate Bond Fund rankings from U.S. News & World Report.
    Regards,
    Ted
    75 Short-Term Bond Funds:
    https://money.usnews.com/funds/mutual-funds/rankings/short-term-bond

    139 Intermediate Bond Funds
    https://money.usnews.com/funds/mutual-funds/rankings/intermediate-term-bond
  • need more details on your objectives. Parking some money to prevent losses? Do you need the income? How much?

    Most people expect a bond fund to provide ballast and sorta go up when the market goes down. Or at least not loose a full year's income.

    Unfortunately with interest rates at these levels, the obvious direction of bond prices is down.

    Look and see what many of the "intermediate" bond funds did in the last couple of weeks when the stock market tanked. DODIX lost .6% or almost 25% of the yearly dividend in less than 3 weeks.

    3 month CDs pay 1.4% You may be a lot happier in April going this route. I think it may be risky to think intermediate bonds will do anything than loose less than equities at this point.
  • How about the fund David highlighted in this months commentary, CBLDX? The selling point, I think, is in the statement below from the commentary. If you want low risk, this might be a consideration.
    CrossingBridge is an affiliate Cohanzick Management, sub-adviser to two exceptionally excellent and distinctive fixed-income funds. They are RiverPark Short Term High Yield (RPHYX/RPHIX) and RiverPark Strategic Income (RSIVX/RSIIX). RPHYX, in particular, has posted an exceptional risk-return profile: it has the highest Sharpe ratio of any mutual fund (as in: #1 out of 7000+) over the past five years and 14th over the past three.
  • I was having trouble finding CBLDX at Fidelity or Vanguard.
  • @sma3
    3 month CDs pay 1.4% You may be a lot happier in April going this route. I think it may be risky to think intermediate bonds will do anything than loose less than equities at this point.
    Any recommendation on banks that offer that rate? For now I am using money market.
  • Why lock into a 3-month CD paying 1.4% when money market accounts are paying up to 1.6%?
    https://www.bankrate.com/banking/savings/rates/
  • edited February 2018
    Bobpa said:

    What are your suggestions for short-term bond funds and high-quality intermediate bond funds?

    As always, age, risk tolerance, sources of income, needs and other factors need to be taken into consideration. I’ll assume poster in near or in retirement. Umm ... I’ve probably got bonds coming out of my ears when considering all the balanced, hybrid and multi-income funds like RPSIX I own.

    Right now I’m looking for safe shelter from a possible avalanche in equities. Not a prediction. Just a concern. So, contrary to all the advice out there from people smarter than me, I’ve been adding to PRGMX (ginnie mae) in dabs and dribbles - including today. While I fully expect to lose some $$ on this position going forward, I consider it one form of insurance against a recession and / or rout in the equity side. What I’m buying here is high grade govt. backed debt from a top money manager (albeit at inflated prices). And were equities to tumble and bonds rise, I’d exit that position rapidly. Not exactly “short term”. Effective duration in the 4-5 year range. More like intermediate I guess.

    I generally don’t like to post trades. But am trying to address the question as fully as I can.
  • edited February 2018
    CBLDX is the only class available as per this 2/1/18 filing (see the top of the filing):

    https://www.sec.gov/Archives/edgar/data/1141819/000089418918000646/tpm-cbridge_497c.htm

    It may take some time to get availability agreements finalized with the brokerages. You may want to contact the brokerages and express your interest in having the fund available.
  • CBLDX is now on several platforms - such as Schwab, Fidelity, TD, etc.
  • edited August 2018

    CBLDX is now on several platforms - such as Schwab, Fidelity, TD, etc.

    At Fido it's shown as a TF fund, $250k minimum (same for taxable and retirement).
  • @Mark, If you use Vanguard as your brokerage, the Vanguard Prime Money Market yields 2.09%. Probably this offer more flexibility than 3-month CD.
  • CBLDX - just what the fund universe doesn’t need. Yet another high yield bond fund. Low duration or otherwise. Even more so with spreads still near historical lows.
  • VSTBX or VSGBX depending on whether you’re after corporate or government
  • @MFO Members: What's the fascination with David Sherman? Although CBLDX is only seven months old, Sherman so far hasn't pulled any rabbits out of a hat. The fund in its short life ranks in the 90 percentile.
    Regards,
    Ted
  • @Sven. Do you know if Vanguard prime MM can lose principal? Thx
  • @MikeW, Like all money market funds, they should not loss the principal. Best is to call Vanguard directly.
  • Ted said:

    @MFO Members: What's the fascination with David Sherman? Although CBLDX is only seven months old, Sherman so far hasn't pulled any rabbits out of a hat. The fund in its short life ranks in the 90 percentile.

    Isn't that what it's supposed to do - greater stability in exchange for lower absolute returns? It will likely rank in the top tenth when everything else swoons.

    That said, I would echo the question about why people are so fascinated with Sherman. What's his reason for starting his own company? More freedom? ISTM that between Riverpark and Brinker Capital Destinations Funds (DCFFX, DGFFX), he's got the flexibility to manage what and how he wants already.

    The only other thing I can guess is more money. No intermediary to split the fees with. That may be why CrossingBridge acquired its other fund CCLIX - its manager had been at a company subadvising it; now CrossingBridge is both marketing and managing the fund.

    I am always concerned when a manager forms his own company - the skill set needed is not quite the same as for managing a fund, and it adds tasks that distract from money management. Some managers make the transition well, others don't.

    https://www.crossingbridgefunds.com/
  • MikeW said:

    Do you know if Vanguard prime MM can lose principal? Thx

    I'm interpreting this question a little differently from Sven.

    Any MMF can lose money, even Treasury MMFs (should the US government decide that it doesn't want to make timely payments).

    That said, the rules for government MMFs and prime (and muni) MMFs are different. The latter are broken into two classes - retail and "everybody" (aka institutional). The institutional ones may float on a daily basis. Technically so do retail prime MMFs, but since they're still allowed to round to the nearest penny, in real life they hold their $1.00 price.

    Still, they're required to post their true NAVs, so you can get an idea of when to panic. You can find VMMXX's daily pricing here:
    https://investor.vanguard.com/mutual-funds/profile/portfolio/vmmxx

    A share is currently worth $1.0002, so if you buy now for a buck, you'll be getting a steal:-)

  • edited August 2018
    Mike W - msf has it right of course (as regards money market funds)

    1 or 2 ran into trouble in years past. But that was before the SEC-mandated reforms that were imposed within the past decade. One that lost money (several decades ago) was of the institutional variety serving large corporate customers - if memory serves. So even than consumers didn’t lose money. But it was common for some firms to play a bit “fast and loose” with ratings on the paper their mm funds held. Also, back than some went out too long on duration and got into trouble when rates moved the wrong way.

    Sure - Theoretically, even a government money market fund could experience losses. But under such a scenario, we’d all have much more serious issues to think about aside from losing a few cents on the dollar in our government money market fund.
  • @msf and @hank thanks very much for the feedback. It sounds like this is a safe fund.
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