Advice on Intermediate Bonds for 457

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Topic Author
mwow83
Posts: 54
Joined: Sun Jul 01, 2012 10:31 pm

Advice on Intermediate Bonds for 457

Post by mwow83 »

You have all helped me so much consolidate and lean my portfolio - I have just one more favor! I'm looking to put money into Intermediate Bonds, my wife's 457 has the following options:
  • Neuberger Berman Core Bond (NCRAX, 0.87% and 4.25% Front Load)
    PIMCO Total Return (PTRRX, 1.1%)
    Federated Bond (FDBAX, .99% and 4.5% Front Load)
    PIMCO High Yield (PHDAX, .9% and 3.75% Front Load)
    Franklin High Yield (FHAIX, .76% and 4.25% Front Load)
What do you all think? We can't move this money now, so our only choice is to pick from the above.
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cinghiale
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Re: Advice on Intermediate Bonds for 457

Post by cinghiale »

Lots of people who participate in this forum hold PIMCO Total Return. I have all of my 457 plan with PTTRX, though the expense ratio is less than half of that offered by your wife's plan (.46%).

Looking at your options, all but PTTRX come with egregiously high loads. All factors being the same, it will take a long time for the slightly lower expanse ratios of the other four funds to make up for the whack you will take with such a high load.

And frankly, there is something unseemly about a bond fund wanting 3.75%-4.50% up front in a time when yields are so low.

Go with PIMCO Total Return. Skip the up front load(s).
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Topic Author
mwow83
Posts: 54
Joined: Sun Jul 01, 2012 10:31 pm

Re: Advice on Intermediate Bonds for 457

Post by mwow83 »

cinghiale wrote:And frankly, there is something unseemly about a bond fund wanting 3.75%-4.50% up front in a time when yields are so low.

Go with PIMCO Total Return. Skip the up front load(s).
Thank you. My thoughts exactly how bonds want that kind of upfront load. Either way, just wanted to do a sanity check. Appreciate it!
bdpb
Posts: 1622
Joined: Wed Jun 06, 2007 3:14 pm

Re: Advice on Intermediate Bonds for 457

Post by bdpb »

Are there any other low cost index funds other than bonds in her 457?

Maybe you could use a low cost stock fund in her account and switch from stocks to bonds in another account to balance out.
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