@davfor, don’t let me or anyone sway you on this fund. I didn’t realize you were a multi year investor in this fund. Thought you might have been like so many where the hot money momentum bond traders gravitated to this fund because it was up YTD earlier this year. This current downswing pretty much had them all selling. May revert back to a steadier course now that momentum traders are gone. It’s not even down 2% for the year. Albeit the entire sector looks pretty weak especially IOFIX and SEMPX.

The mortgage funds have been trading like they are broken for a couple months now. It began with SEMPX and BDKAX. It was only inevitable this weakness would filter down to their sister funds IOFIX, DPFNX, and RCTIX. Very illiquid holdings. EIXIX and RCTRX have held the best in this sector. Ominous that these funds have performed so poorly in light of a strong undercurrent recently in junk bonds. Not sure what can turn these around other than strength in the 10 year.

A part of me struggling to understand the handwringing for buy-and-hold investors.
If you have a say 50/50 allocation between stocks and bonds, why would you not just rebalance? Take-advantage of the cheapness?
I get it with trend-following or trading strategies, which I like, but don't long-term investors need to accept that some years will be worse than others, no matter what the asset class?
I saw DODIX mentioned.
Let's say by end of year, it's -9%. About its worst MAXDD. Don't two +9's get remembered, as in 2019 and 2020?
Here are calendar year returns going back to 1990:
Year Count: 32
Worst Year: -2.9
Best Year: 20.2
Average Year: 6.4
Sigma Year: 5.5
YTD (thru 3/24): -5.6
2021: -0.9
2020: 9.4
2019: 9.7
2018: -0.3
2017: 4.4
2016: 5.6
2015: -0.6
2014: 5.5
2013: 0.6
2012: 7.9
2011: 4.8
2010: 7.2
2009: 16.1
2008: -0.3
2007: 4.7
2006: 5.3
2005: 2
2004: 3.6
2003: 6
2002: 10.7
2001: 10.3
2000: 10.7
1999: -0.8
1998: 8.1
1997: 10
1996: 3.6
1995: 20.2
1994: -2.9
1993: 11.4
1992: 7.8
1991: 18.1
1990: 7.4
Granted, all during secular bond bull. But there were certainly some periods in there of rising rates, if not with concurrent inflation.
Also, if there is sufficient liquidity, and there seems to be, why is selling a bond or TBill early bad? Can't you just pick-up another with the reduced principal but higher interest for the remainder of the planned term? Don't you end up in same place, less trading fee/bid spread?
Now if liquidity is crashing, I get it (e.g., IOFIX in March 2020, I do remember and will never forget). Is that what the concern is for investors ... that there will not be enough liquidity with everybody running for the door in bond fund land, perhaps including the Fed?

Excellent analysis and summary. I understand the worry with bonds but most investors are not able to trade in and out to successfully chase the best returns. The B&H path I am following.

A part of me struggling to understand the handwringing for buy-and-hold investors.
If you have a say 50/50 allocation between stocks and bonds, why would you not just rebalance? Take-advantage of the cheapness?
I get it with trend-following or trading strategies, which I like, but don't long-term investors need to accept that some years will be worse than others, no matter what the asset class?
I saw DODIX mentioned.
Let's say by end of year, it's -9%. About its worst MAXDD. Don't two +9's get remembered, as in 2019 and 2020?
Here are calendar year returns going back to 1990:
Year Count: 32
Worst Year: -2.9
Best Year: 20.2
Average Year: 6.4
Sigma Year: 5.5
YTD (thru 3/24): -5.6
2021: -0.9
2020: 9.4
2019: 9.7
2018: -0.3
2017: 4.4
2016: 5.6
2015: -0.6
2014: 5.5
2013: 0.6
2012: 7.9
2011: 4.8
2010: 7.2
2009: 16.1
2008: -0.3
2007: 4.7
2006: 5.3
2005: 2
2004: 3.6
2003: 6
2002: 10.7
2001: 10.3
2000: 10.7
1999: -0.8
1998: 8.1
1997: 10
1996: 3.6
1995: 20.2
1994: -2.9
1993: 11.4
1992: 7.8
1991: 18.1
1990: 7.4
Granted, all during secular bond bull. But there were certainly some periods in there of rising rates, if not with concurrent inflation.
Also, if there is sufficient liquidity, and there seems to be, why is selling a bond or TBill early bad? Can't you just pick-up another with the reduced principal but higher interest for the remainder of the planned term? Don't you end up in same place, less trading fee/bid spread?
Now if liquidity is crashing, I get it (e.g., IOFIX in March 2020, I do remember and will never forget). Is that what the concern is for investors ... that there will not be enough liquidity with everybody running for the door in bond fund land, perhaps including the Fed?

You can go all in on the interest rate trade and short treasuries with an inverse fund TBF or TBX.
If interest rates continue to rise, PFIX will continue to do well.
Or look at funds that have not crashed so far this year. RCTIX ICMUX RPHIX are down a bit but probably will not yield much and won't make a lot of money.
Same thing is true of short duration bond funds like VUSFX.
I am a bit concerned that RCTIX and ICMUX are sorta a black box, focused on RMBS and non agency MBS. Remember IOFIX?
Lots of people are recommending dividend stocks. I am very reluctant to increase my equity exposure by buying dividend stocks just to get income. Consumer staples and Utilities are more resilient to market declines, but could still drop 20% in a major recession.
Right now I am staying in cash and short term bonds funds, with some RCTIX ICMUX RPHIX and PFIX
I am open to other ideas.

PMZIX -6 cents
DODIX -11 cents
CLMAX -6 cents
PIMIX -4 cents
OSTIX -7 cents
PDIIX -7 cents
MWIGX -7 cents
MWFEX -5 cents
BHK -12 cents
DMO -29 cents
Better ...
RCTIX -1 cent
CBLDX -1 cent
DLDFX -2 cents
SEMMX -1 cent
ICMUX -1 cent
ZEOIX -3 cents
DHEAX -2 cents
RHHIX -1 cent
But, look here:
IOFIX even
DPFNX even
BDKAX even

HMEZX and PVCMX are both up YTD. Its nice to see a little green in there somewhere.

Lots of funds green for the year just very few in the multi sector income category as Charles was alluding to. RCTRX is a little known income fund that has held firm through the turmoil in its sister funds ala IOFIX, SEMPX, and others. At one time I saw where you were a holder of RCTRX which was a good move. I had tried to purchase it awhile back but unable to do so. I wouldn’t necessarily advise buying it now though.

Mortgage credit, which has stayed calm and barely positive during the YTD storm, is showing some weakness now, with IOFIX's blowout of the last two days leading the way.

Warning: So did FAAFX, WBMIX, AQRIX, QVAL, IOFIX, ZEOIX.

Maybe it is just me but still don’t see the fear associated with past declines of this magnitude. It is all about buying dips and potential buys. Although not into analogous year investing, this reminds me a bit of 1973. There we had weak January performance after a double digit gain in 1972. Like now the weakness was due to rising oil and commodity prices and inflation fears with a Fed that was about to aggressively raise rates. We then embarked on the longest and deepest bear market since the Depression.
@BaluBalu. As you saw another bad day for the junk bond OEFs a bit surprising in light of the strength in the major equity indexes. Many of the bank loan funds were lower too. The latter began acting suspiciously earlier this week so I said goodbye. That leaves me at 70% with the usual suspect of IOFIX which at least so far has survived the carnage elsewhere and up YTD. The play there though seems pretty much over. Wish I could buy its younger albeit less stellar performing sister which has yet to have a down month since its October 2020 inception, but not available to me at TD Ameritrade. Kind of following in the footsteps of IOFIX which has been positive every month but five over the past 6.67 years. Of course one of those five was a doozy for those that stayed the course.

It seems that IOFIX can no longer be traded at TDA. Does anybody still hold this fund there, and if so, has TDA notified you and given you any options? If I remember, TDA was still offering it a week or two ago. I used to hold it at TDA, but don't own it currently.
https://research.tdameritrade.com/grid/public/mutualfunds/profile/profile.asp?symbol=IOFIX

INTC, ABBV, HRL & PEP. In my fund holdings the closest I come to green was in IOFIX -0.08% or a penny.

I suspect we are now beyond the 2020 crash rebound period, and I think we will have to accommodate more rising interest rate impact. I don't have strong predictions about particular funds, but I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.

Today’s 3 cent gain continued a recent pattern of outsized gains one to two trading days before ex dividend date. This is the reverse of the pattern in effect prior to 2020. Their portfolio is trading around 96 cents on the dollar up considerably from the 60 to 80 cents since 2017. So I agree its best days are behind it and thinking 2022 may only see a 4% to 5% total return. Hopefully I am dead wrong. Can’t think of many or any bond fund that had such a stellar return this year. The managers feel the fund has another 25% to 30% before the legacy non agencies play is over. I would probably cut those numbers in half if only because fund managers in general tend to be overly optimistic. Sure has been a unique and special bond fund over the years and if one was able to sidestep the carnage in March 2020 and return the following month.

... I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.

Hi dt, it's happening as we type. IOFIX has slowed quite a bit in December, and Pimco even cited non-agency mortgage weakness as a negative impact on the Pimco Income nav in the latest monthly report. Also, munis have ~ flatlined in this historically positive time.
The stakes in my port in allocation and alt funds are slowly heading up.
Good luck with the next round of investing decisions.
P.S. Good commentary from Junkster on IOFIX.

I suspect we are now beyond the 2020 crash rebound period, and I think we will have to accommodate more rising interest rate impact. I don't have strong predictions about particular funds, but I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.

Yes-I'm glad I only have $1,000 invested in that fund. The 90 day clock(holding period) is running for me on this fund, unless they decide to emulate IOFIX and I have to pay the hostage fee to get out sooner !

Terminology becomes a confusing issue in these kind of threads. "Short Term Bonds" is a category of M* and permeates search functions at various brokerage houses for competing funds in that category. Short Duration/Limited Duration is often a descriptive term, in titles of various funds, and can often apply to almost any category in which duration is being emphasized. Even the term High Yield can be confusing, often describing credit status references of junk bonds, but occasionally describing the amount of yield within any category of funds. In my cash alternative account, used as an alternative to bank accounts, I often use DHEAX (from the M* category of short term bonds), but it is predominantly a securitized asset fund that is very risky for the category, but I relate to it more as a nontraditional bond oef, with short duration. I often use RPHIX/RPHYX, which M* categorizes as a High Yield bond fund, but with very short duration--one of the least volatile and smooth performing funds I own and I consider it a good alternative to the category of Short Term Bond funds which generally offers too little yield with higher investment grade bonds. (RPHIX/RPHYX has restricted/limited access) Another fund I often use for alternatives for bank accounts, is FPFIX, a short duration low risk from the nontraditional category. I prefer FPFIX over its more well known cousin, FPNIX, which is a very good and low risk short term bond category fund. (note FPNIX is in a limited access status).
With all of that said, I also use a lot of short duration bond oefs in my more risky IRA holdings, that mostly have junkier credit ratings, but often in more of a "trade" role. In 2021 I have use IOFIX, SEMMX, several FL/BR funds, etc. which often provides higher yield and higher total return. In the multisector bond category, even venerable funds like PIMIX are very short duration, along with it's PIMCO relative PEGIX. At any rate, terminology can often be confusing, so the OP may want to more specifically define what he is looking for, and what role he wants those funds to fill in his portfolio.

After LOTS of screening and test driving in these areas:
Own ST/ST HY: LALDX (thanks to another poster, and that also lead me to research and own MS LBNDX) and RPHYX, both provide consistently boring, consistently positive TRs for monies awaiting a better home. IMO, these are two of, if not the very best for the job I assigned them: inch forward and don't lose me any money. RPHYX of course now closed.
Likely the next to be added to that group with similar pedigree: PFIIX/PFIAX.
Also own HY: BGHIX (owned it a while as DHHIX), VWEHX and FAGIX.
Others in ST/ST HY cat's that may come aboard: IOFIX, BUHFX, TUHYX, RCTIX.

. Also RiverPark has RSIVX…somewhat longer duration than RPHYX, but performing relatively well this year it seems.
Honestly, if you’re ok with courting risk, IOFIX is as steady as they come ....

RSIVX is doing great this year; hadn't thought about it in a long, long time. It's been a dog for most of its life, but must be doing something right this year. Will look into it.
Agree on IOFIX too. Several other securitized OEFs have fallen off the pace lately, but it's keeping on keeping on.
JD's RCTRX suggestion looks pretty good in securitized, too - never heard of it till this thread.

OSTIX, Osterweis Strategic Income (TF at most brokerage houses)…..or ZEOIX, Zeo Short Duration Income (also TF). Also RiverPark has RSIVX…somewhat longer duration than RPHYX, but performing relatively well this year it seems.
Honestly, if you’re ok with courting risk, IOFIX is as steady as they come (the once-in-a-decade, plus, COVID crash notwithstanding….). 4-5% yield and it generally goes up or stays flat most days. I know it’s not high yield! Don’t kill me for suggesting it haha.