Pimco Total Return Fund

[chinaco]

I am in the middle of rebalancing (shifting allocation) to prep or retirement in approx 5 years. This includes DW tax-deferred PST and 401k. She has a number of stock funds available. Most of the allocation is in S&P 500 index. We were thinking of moving a % to an international fund to get a bit moe non-US diversification. This would put us at about 12% of the equity allocation and 8% overall (bonds and stocks).

On the bond side, I am targeting a 70/30 stock/bond mix. On the Fixed side of the house the company has 2 short-term options and one intermediate term bond fund. The fund is the Pimco Total Return Bond fund. It seems to have a good morningstar rating. The manager is apparently an Icon for Bond investments.

Before we leaped, I looked and noticed that the fund manager moved most of the assets out of bonds and seems to be using a number of simple derivatives (futures and options). He is parked in alot of cash.

What is your opinion about this fund? We are considering putting some serious money in it. I got a little concerned when I noticed that he is parking the money.

[brewer12345]

The fund is run by the best known management team inthe bond world. They are very sophisticated and know their stuff. OTOH, they run so much money that it is tough for them to do things without moving the market. You could do a lot worse than the institutional class of this fund.

[Linney]

I had PTTRX (the Institutional version of the Pimco Total Return Fund) in my 401k for many years and was very happy with its solid performance.

The only reason that I switched out of PTTRX is that our 401k plan recently added the Dodge & Cox Intermediate Term Bond Fund as well as the PIMCO TIPs fund and the option to go 50/50 with that pair won out over PTTRX alone.