Pimco vs. Jack Bogle on active management of bonds

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dad2000
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Pimco vs. Jack Bogle on active management of bonds

Post by dad2000 »

http://www.pimco.com/EN/Insights/Pages/ ... ongly.aspx

Not much new in terms of the arguments. Perhaps the outflows into bond etfs are getting to them...
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NoRoboGuy
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by NoRoboGuy »

PIMCO has to go on the attack to stop the bleeding. Not surprised the CNBC article fails to mention the departure of Bill Gross nor the resulting shift in assets between the two fund giants. Sigh.
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cfs
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by cfs »

As expected.

Nothing new on the articles, I read it this morning. I expect the relentless assault on indexing and mainly against Vanguard to continue from PIMCO, American Funds, Janus, et al. Here is a link to an article dealing with American Funds (this is from Morningstar), "Improving the Odds in Active Management, American Funds' new study makes the case for seeking funds with low fees and high manager ownership."

http://news.morningstar.com/articlenet/ ... ?id=668663
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Lynette
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by Lynette »

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Last edited by Lynette on Sat Jan 12, 2019 3:12 am, edited 1 time in total.
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galeno
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by galeno »

BND: 5 yr CAGR = 4.0% GSD = 2.9%.

PTTRX: 5yr CAGR = 5.1%. GSD = 3.6%.
KISS & STC.
countmein
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by countmein »

forget PTTRX. PIMIX is the one you want.

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Erwin
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by Erwin »

countmein wrote:forget PTTRX. PIMIX is the one you want.

Image

What is the correlation between PIMIX and the stock market versus the total bond index and the stock market?
I am going to guess that for PIMIX it is significantly higher. And if that is the case, you are better off selling PIMIX and buying SPY, thus taking the risk on the stock market, where the sharpe number would be higher.
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lee1026
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by lee1026 »

5 year sharpe ratio on SPY is 1.16.
Trader Joe
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by Trader Joe »

PIMIX looks very interesting. Thank you for posting.
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ResearchMed
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by ResearchMed »

Trader Joe wrote:PIMIX looks very interesting. Thank you for posting.
PIMIX is the Institutional class of PONDX.

Ordinarily, there is a $100k initial investment required for PIMIX, but at Vanguard, it can be purchased with an initial investment of $25k.

PONDX has a slightly higher ER than PIMIX (no surprise), but if one wants to add more to PIMIX (small increments are allowed), there is now a fee to do so, whereas PONDX has no transaction fee.

We've also been noticing PRAIX, but that's for Inflation-protected bonds, and I don't think there is an "investor" class, or at least not available at Vanguard.
Same situation as PIMIX in terms of initial and subsequent investments.

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countmein
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by countmein »

I use PIMIX as part of my equity allocation. I consider it a factor diversifier, the factor in question being "credit risk". It does contain some term risk, but it tends to keep the duration low. It allocates across the spectrum of credit risk-- EM, MBS, US and global low-grade corporates, etc. The tradeoff for this convenience is active management risk, but I think one could do worse than Dan Ivascyn, he's at least preferable IMO to Bill Gross. Another benefit is mild leverage thus greater risk density (more exposure for less $). One thing that does concern me though is the gigantic AUM and whether it's susceptible to liquidity shocks.

But basically the idea is to separate credit from term and allocate it within equity (my bond allocation is 100% CDs, but will add treasury and TIPS over time). I considered CEFs but figured I'm too ignorant to play in that ballpark just yet.

PIMIX / VTI correlation = -0.04
BND / VTI correlation = -0.16
NicoleVM
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Active vs. Passive in bonds

Post by NicoleVM »

Hi there - saw this on CNBC, related to the Bogle/PIMCO flap on Friday. Thought it pointed to an interesting point of the active/passive debate - bonds. What do y'all think? Is passive as powerful in bond investing as equities?
http://www.cnbc.com/id/102103337
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by LadyGeek »

^^^ NicoleVM, welcome! I moved your post into the on-going thread.

You have to be fast around here, as we've been discussing this for a few days. You've found a new article which will add another perspective. Feel free to add your own.
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NicoleVM
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by NicoleVM »

Thank you! Yes I thought there was some value in the S&P analyst's data on which segments of the bond market passive beats active. In some bond markets - munis - there is a definite advantage to active management. But markets like high yield, indexing wins.
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by wander »

Not really relate to the topic discussed here, but I read this article Bogle: Pimco shows why active funds don't work written by Jeff Cox. He states that Jack Bogle is the founder of Fidelity. I wonder how a writer working for CNBC doesn't know this basic true.
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cfs
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by cfs »

wander wrote:Not really relate to the topic discussed here, but I read this article Bogle: Pimco shows why active funds don't work written by Jeff Cox. He states that Jack Bogle is the founder of Fidelity. I wonder how a writer working for CNBC doesn't know this basic true.
From my side of the keyboard . . . Actually the article by Jeff Cox is related to the conversation. Concur, the author made a big mistake by calling Mister Bogle the founder of Fidelity. Jeff Cox is a finance editor with CNBC dot com, he is not a rookie, I guess no one is proof-reading or double checking his writings.
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by Call_Me_Op »

In my view, active management generally has a huge risk - and that is risk associated with the manager. If I were to invest in an actively-managed bond fund, it would have to have a narrowly-defined charter and very low cost.
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Re: Pimco vs. Jack Bogle on active management of bonds

Post by Doc »

Bogle wrote:In the latest salvo of a surprisingly public debate between two of the biggest names in fund management, Bogle said the underperformance of Pimco's flagship Total Return mutual fund provides a timely reminder that for most investors, index funds are the way to go.
Wasn't it less than a year ago that Bogle was proposing changes in the the BarCap Agg Index because it has become so overweight in government securities.

Question: What is the difference in a fund changing its portfolio by active management or changing its portfolio by changing its index?
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