PIMIX - Bond position / allocation

[zekeboz]

Hi - Thinking about expanding my PIMIX position as I get closer to making the jump into retirement (next 6-12 months), currently 1% but was thinking 5% of overall portfolio (would = 150k). Today I am roughly 80/20 and would like to move to a rough 70/30~75/25 by re-allocating funds in tax sheltered accounts into PIMIX and my existing bond positions, BND and VSTBX.

Today:

PIMIX = 1%
BND = 15%
VSTBX = 5%

Future:

PIMIX = 5%
BND = 20%
VSTBX = 5%


The fund's costs are higher than average but in my research it appears the performance has always been above normal, ex chart from Portfolio Visualizer.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2007&firstMonth=4&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&endDate=04%2F04%2F2018&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=PIMIX&allocation1_1=100&symbol2=VBTIX&allocation2_2=100&symbol3=VBIMX&allocation3_3=100

Thoughts? Any PIMIX long term holders out there that have this fund play a prominent role in asset allocation?

Thanks!

 

[Montecfo]

I own PONAX which is the investor class of that same fund for quite a few years and I do like it. It is a larger percentage of my bond/FI allocation which consists of this fund, intermediate core+, bank loans, Hi-yield, and a large chunk of CD's and cash.

I did not add to it this year but I like the 1.74 year effective duration. I do not find expenses troubling given the performance over time. Obviously I would like PIMIX even more given the lower costs if I wished to allocate funds needed to meet the min.

Good Investing!

 

[Mr._Graybeard]

The fund did really well when they were playing interest-rate swaps, and I held a decent position in PIMIX at that time. Lately their primary holdings have been in treasuries, treasury futures and mortgage bonds. I didn't think that focus was worth the (increased) managment fee the fund was charging, so I got out.

I have been building a position in Fidelity's multisector, FADMX. It seems to me that the team there is working harder to produce income for lower fees. You could argue that the PIMCO team is focused on safety right now, but that would be a significant change in priority for PIMCO.

Either way, I'm of the opinion that active management pays over indexing in the fixed-income market. As a disclaimer, part of my "active management" is in cash. And I am not in the growth phase of my life.

 

[zekeboz]

I own PONAX which is the investor class of that same fund for quite a few years and I do like it. It is a larger percentage of my bond/FI allocation which consists of this fund, intermediate core+, bank loans, Hi-yield, and a large chunk of CD's and cash.

I did not add to it this year but I like the 1.74 year effective duration. I do not find expenses troubling given the performance over time. Obviously I would like PIMIX even more given the lower costs if I wished to allocate funds needed to meet the min.

Good Investing!

Thanks for the feedback

some houses like Vanguard allow lower investment levels, they are at 25k vs the 1mill. list level. Either Fid. And/or schwab might be the same.

 

[zekeboz]

…I didn't think that focus was worth the (increased) managment fee the fund was charging, so I got out.

I have been building a position in Fidelity's multisector, FADMX. It seems to me that the team there is working harder to produce income for lower fees. You could argue that the PIMCO team is focused on safety right now, but that would be a significant change in priority for PIMCO.

Either way, I'm of the opinion that active management pays over indexing in the fixed-income market. As a disclaimer, part of my "active management" is in cash. And I am not in the growth phase of my life.

Thanks for the info.

Took a look at FADMX, recent returns are better but the fees appears to be a little higher than PIMIX .67 vs .62

I’ll dig a little deeper on that one.

 

[Mr._Graybeard]

Thanks for the info.

Took a look at FADMX, recent returns are better but the fees appears to be a little higher than PIMIX .67 vs .62

I’ll dig a little deeper on that one.

Hm, I thought the PIMIX ER was higher than that. In fact, I was looking at a forum thread from last April that indicated the ER for PIMIX was about 1%

But the PIMCO web site confirms your 0.62% ... in fact, Morningstar says it's 0.5% adjusted. I probably wouldn't have bailed when I did if the fee was that low.

 

[Montecfo]

Thanks for the feedback

some houses like Vanguard allow lower investment levels, they are at 25k vs the 1mill. list level. Either Fid. And/or schwab might be the same.

I will check on that, thanks.

 

[Montecfo]

Either way, I'm of the opinion that active management pays over indexing in the fixed-income market. As a disclaimer, part of my "active management" is in cash. And I am not in the growth phase of my life.

Disclaimer aside, I think you are right.

 

[Montecfo]

Thanks for the feedback

some houses like Vanguard allow lower investment levels, they are at 25k vs the 1mill. list level. Either Fid. And/or schwab might be the same.

Zekeboz,

Hey I found that you are correct. At E-Trade I can own PIMIX without regard to the minimum. Thanks for pointing me in that direction. Now have a couple of other bins funds I may be able to swap out.

Monte

 

[zekeboz]

Great! Glad I could help.

 

[bada bing]

I have 13% of portfolio = 1/3 of my fixed income allocation in PIMIX. I have been in PIMIX continuously since 2010. About $300K in PIMIX. I have a couple biases in that I don't like bonds at this point and I like PIMCO for their fixed income management. I am also in another PIMCO fund - PSLDX - as 1/3 of my equity holdings and have been in that position, also since 2010. I count PSLDX as an equity holding even though it is a leveraged balanced fund with S&P500 futures and a managed bond portfolio.

The remainder of my fixed income allocation is in a 10 year CD ladder, cash and a cash balance plan from work that pays 5% annually.

PIMCO isn't for everyone, but I've been extremely happy with my PIMCO mutual funds. But I may have just lucked out with the time frame I've been invested with them. PIMIX had an incredible run for a short term bond fund from 2010-2015. Last couple years have been less exciting, but they still are outperforming the averages in short term bonds by more than enough to justify fees IMO.

I am at Schwab where PIMIX used to have a $100K minimum. I'm pretty sure that is substantially reduced now. Same with PSLDX.