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opinions on two bond funds
10-04-2007, 11:19 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 2,851
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opinions on two bond funds
I have the option of two bond funds in my 401k. I'm not too excited about either of them, but currently most of my funds are in the 401k, so I'm thinking of using one them instead of waiting to build up a significant bond exposure outside of the 401k.
The two funds are:
Fidelity Intermediate Bond Fund (FTHRX) - .45 ER
Pimco Total Return Instutional Class (PTTRX) - .43 ER
Does anyone have any opinions regarding these two funds?
Thanks!
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10-05-2007, 01:50 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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Previous Post
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10-05-2007, 07:44 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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My wife has some money in the Pimco fund in her 401K account. She's pretty happy about the return.
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10-05-2007, 07:48 AM
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#4
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Confused about dryer sheets
Join Date: May 2005
Posts: 7
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PTTRX Wins
PTTRX M* rating *****
Total Returns
2000 12.1%
2001 9.5%
2002 10.2%
2003 5.6%
2004 5.2%
2005 2.9%
2006 4.0%
2007 YTD (10/4/2007) 5.23%
FTHRX M* rating ***
Total Returns
2000 9.8%
2001 8.8%
2002 9.2%
2003 5.0%
2004 3.2%
2005 1.8%
2006 4.3%
2007 YTD (10/4/2007) 2.79%
Growth of $10,000 PTTRX 2000 - 2007 YTD $16,923
Growth of $10,000 FTHRX 2000 - 2007 YTD $15,428
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10-05-2007, 11:10 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 2,851
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Thanks for the feedback. My problem is that I really dislike the idea of holding a bond fund. When I look at the Pimco fund, it has a high % in cash. If I wanted a high % in cash, then I'd hold cash. If I buy into a bond fund, then I want to hold bonds.
What I really want to buy is a bond index, but I can't figure out how to make it work in the accounts I have available. Right now I have a lot in my 401k, but with limited choices. Investing in one of these bond funds makes it really easy to hit my bond allocation and lets me focus the other accounts on equities. If I choose another fund, then I have to go through our 403b and that will take awhile to build up a substantial amount (but I get to choose Vanguard funds, which would make me happy). Ah, decisions...
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10-06-2007, 12:39 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 2,851
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And looking more, I found the following: Bill Gross Wants PIMCO Bailout
In my mind, one more reason to stay away from actively managed funds...
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10-06-2007, 02:03 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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Quote:
I really dislike the idea of holding a bond fund.
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Yes... when stocks are growing... Bonds usually pale in comparison.
But when the correction hits... if one has been rebalancing they locked in some of the gain.
It all depends on how much risk you are willing to take. The conventional wisdom is to add fixed as one ages to insulate them from some of the fluctuations (or down-turn) of the equity markets.
One other thing to consider, (which is easy for us to forget)... what if a long-term (10 year) protractive down-turn occurred like Japan in the 90s.
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10-06-2007, 10:32 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 2,851
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I don't have problems holding bonds, just actively managed bond funds.
This is actually quite a turnaround for me. When I started, I was going to go with 100% equities because of long time horizon.
Thanks to what I've read here and on diehards, I came to the conclusion that I can easily have 10% bonds and recently I've been considering 20% bonds.
If I could do this in my 401k, then I'd be done, but now I'm having problems selecting one of these two funds: they just don't fit what I'm looking for.
Unfortunately, that's the only place I have the cash to make the change now instead of later.
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10-06-2007, 10:56 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,599
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I use PTTRX in my 401K mostly because I'm not happy with the higher ER equity funds. Of the two it has the lower expense ratio. As you increase your savings in an IRA or taxable account you can select other investments. That's the problem with most 401K accounts -- very limited choices.
It's not a bad investment -- it's done very well for me this past year.
__________________
Only got A dimple, would have preferred 2!
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10-06-2007, 06:17 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Quote:
Originally Posted by kiki
I don't have problems holding bonds, just actively managed bond funds.
This is actually quite a turnaround for me. When I started, I was going to go with 100% equities because of long time horizon.
Thanks to what I've read here and on diehards, I came to the conclusion that I can easily have 10% bonds and recently I've been considering 20% bonds.
If I could do this in my 401k, then I'd be done, but now I'm having problems selecting one of these two funds: they just don't fit what I'm looking for.
Unfortunately, that's the only place I have the cash to make the change now instead of later.
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If your choices are the Fido fund and the Pimco fund, I would pick the latter. You will be getting access to the most storied manager in the historyof the bond market for 41BP a year - a steal, relatively speaking.
I have my issues with Bill Gross, but you should get used to ignoring what he says in public. He has a tendency to "talk his book"" as we say in the trade. But he has historically been an extremely smart manager that makes lots of excess return for his investors.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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10-07-2007, 03:37 AM
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#11
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Dryer sheet aficionado
Join Date: Oct 2007
Posts: 34
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Quote:
Originally Posted by brewer12345
If your choices are the Fido fund and the Pimco fund, I would pick the latter.
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I would agree with this as stated by most of the replies, but if you are still unsure of which one (rather than being unsure of how to allocate into bonds) buy some of each!
Jim.
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