Why not 100% PSLDX?

[get_g0ing]

Wondering why there is no ETF version of PSLDX?

Also I don't suppose we can buy PSLDX this in M1, right?

[cos]

Wondering why there is no ETF version of PSLDX?

Also I don't suppose we can buy PSLDX this in M1, right?

NTSX is the closest you're going to get. It has its own thread over here: viewtopic.php?f=10&t=302218

[GaryA505]

I have a small Roth that I will be using for the kids college expenses in about 6-10 years. Today I was toying with the idea of using 50/50 mix of PSLDX/CASH in this account. Crazy?

Why not just hold 50% S&P 500 and 50% of some investment-grade index bond fund? It should have basically the same risk and return but you get to save on the 0.59% management fee of PSLDX

Plus, doing it yourself would also allow you to construct a better diversified portfolio. E.g 50% VT and 50% ILTB

Maybe, but considering using 50% PSLDX and 50% SHV, and short-term treasuries don't have the interest rate of 10 year bonds.

If your anticipated expense is in 10 years, SHV creates more
interest rate risk for you than ILTB does because of the greater mismatch between the time horizon and the bond duration.

So SHV would earning a lower yield while crating more risk. I’m not sure that’s prudent. But another alternative would be iShares® iBonds® Dec 2029 Term Corporate ETF (IBDU).

6 to 10 years.

[vineviz]

6 to 10 years.

That’s what I thought you said, and it’s what I based my answer on. I’d probably prefer IBDU to ILTB, but either is probably preferred over SHV.

[get_g0ing]

Wondering why there is no ETF version of PSLDX?

Also I don't suppose we can buy PSLDX this in M1, right?

NTSX is the closest you're going to get. It has its own thread over here: viewtopic.php?f=10&t=302218

Hi there,

From some of the discussions it sounds like the expected return for NTSX is actually lower than S&P 500

[kevinf]

No, the expected CAGR is higher due to reduced draw-down. It is possible for PSLDX and NTSX to under-perform a 100% S&P 500 fund long-term, but there are very few realistic scenarios that result in that happening.

If you buy equally into both NTSX and a S&P 500 fund with the same expense ratio, then NTSX will likely lag the S&P 500 fund slightly during steady market increases. When the market dips however, NTSX will start catching up due to the reduction of draw-down expected by the 60% bond weighting. Eventually, NTSX should be well ahead of your S&P 500 fund.

You can use portfolio visualizer to see how funds performed to date.

People have backtested further with simulated NTSX and PSLDX and it holds up.

[GaryA505]

If you buy equally into both NTSX and a S&P 500 fund with the same expense ratio, then NTSX will likely lag the S&P 500 fund slightly during steady market increases. When the market dips however, NTSX will start catching up due to the reduction of draw-down expected by the 60% bond weighting. Eventually, NTSX should be well ahead of your S&P 500 fund.

And what should we expect from PSLDX?

[hdas]

--------

[kevinf]

If you buy equally into both NTSX and a S&P 500 fund with the same expense ratio, then NTSX will likely lag the S&P 500 fund slightly during steady market increases. When the market dips however, NTSX will start catching up due to the reduction of draw-down expected by the 60% bond weighting. Eventually, NTSX should be well ahead of your S&P 500 fund.

And what should we expect from PSLDX?

Given that it is a 100% S&P 500 fund with an addition of leveraged bonds, I'd expect it to perform as well or better during market rise.

[GaryA505]

If you buy equally into both NTSX and a S&P 500 fund with the same expense ratio, then NTSX will likely lag the S&P 500 fund slightly during steady market increases. When the market dips however, NTSX will start catching up due to the reduction of draw-down expected by the 60% bond weighting. Eventually, NTSX should be well ahead of your S&P 500 fund.

And what should we expect from PSLDX?

Given that it is a 100% S&P 500 fund with an addition of leveraged bonds, I'd expect it to perform as well or better during market rise.

As we all know, there's no free lunch. What's the downside?

[kevinf]

Lots of prior posts here for you to read all about PSLDX.

Here's a link to page 1: viewtopic.php?f=10&t=305950

[InvestInPasta]

As we all know, there's no free lunch. What's the downside?

I asked the same question.
As someone explained, this fund would be a disaster if both stocks and safe bonds fell because he is leveraged on both.
But it's hard to see how they could fall together, maybe with a rising inflation.

[rascott]

If you buy equally into both NTSX and a S&P 500 fund with the same expense ratio, then NTSX will likely lag the S&P 500 fund slightly during steady market increases. When the market dips however, NTSX will start catching up due to the reduction of draw-down expected by the 60% bond weighting. Eventually, NTSX should be well ahead of your S&P 500 fund.

And what should we expect from PSLDX?

Given that it is a 100% S&P 500 fund with an addition of leveraged bonds, I'd expect it to perform as well or better during market rise.

As we all know, there's no free lunch. What's the downside?

Downside comes in when/if there are rising long- term rate trends.... it could well trail the SP500 during such an environment for years.

This fund has only existed during a period of falling long term rates.

[vineviz]

As we all know, there's no free lunch. What's the downside?

I asked the same question.
As someone explained, this fund would be a disaster if both stocks and safe bonds fell because he is leveraged on both.
But it's hard to see how they could fall together, maybe with a rising inflation.

There have been long periods of market conditions where the returns of a strategy like that of PSLDX would likely have barely matched a simple Total Stock Market fund (e.g. 1946 through 1964) or dramatically underperformed it (e.g. 1965 through 1981).

I backtested a rough approximation of PSLDX, and here's what the journey would have looked like from 1963 through 1992 compared to a simple investment in the S&P 500. Not pretty.

[Ramjet]

As we all know, there's no free lunch. What's the downside?

I asked the same question.
As someone explained, this fund would be a disaster if both stocks and safe bonds fell because he is leveraged on both.
But it's hard to see how they could fall together, maybe with a rising inflation.

There have been long periods of market conditions where the returns of a strategy like that of PSLDX would likely have barely matched a simple Total Stock Market fund (e.g. 1946 through 1964) or dramatically underperformed it (e.g. 1965 through 1981).

I backtested a rough approximation of PSLDX, and here's what the journey would have looked like from 1963 through 1992 compared to a simple investment in the S&P 500. Not pretty.

Obviously nobody can predict the future, but do you have any thoughts on how you think PSLDX will hold up in the years to come

[vineviz]

Obviously nobody can predict the future, but do you have any thoughts on how you think PSLDX will hold up in the years to come

It really depends on how the level and shape of the yield curve changes, but if we assume that those remain more-or-less where there are now then I'd expect a fund like PSLDX to outperform an S&P 500 fund by maybe 50-100 bps annually. And it wouldn't take much "bad luck" to drop that down to nothing for a 5-10 years.

Definitely a much more muted performance than the past decade has given us.

[jibantik]

Obviously nobody can predict the future, but do you have any thoughts on how you think PSLDX will hold up in the years to come

It really depends on how the level and shape of the yield curve changes, but if we assume that those remain more-or-less where there are now then I'd expect a fund like PSLDX to outperform an S&P 500 fund by maybe 50-100 bps annually. And it wouldn't take much "bad luck" to drop that down to nothing for a 5-10 years.

Definitely a much more muted performance than the past decade has given us.

RIP performance chasers

[GaryA505]

What about using PSLDX in a sort of "Larry Portfolio"?

The original LP was something like SCV + Treasuries, and the idea was to use something with more potential gain (and the higher risk that goes with that) on the equity side, but in a smaller percentage (maybe 30/70 or 40/60). So could you use PSLDX + Treasuries instead? Wouldn't PSLDX fit the role of that "higher potential gain with higher volatility" side?

I'm just thinking out loud here.

[GaryA505]

Like this:
https://www.portfoliovisualizer.com/bac ... tion3_2=30

or this:

https://www.portfoliovisualizer.com/bac ... tion4_1=60

[abuss368]

I’m thinking of going 100% PSLDX (PIMCO StocksPLUS Long Duration Fund) for my entire portfolio. I like the fact that I get both stocks and bonds in one handy package and I think of it as the ultimate balanced portfolio. I feel like I understand both the risks and how the fund works. I would love to get feedback from the forum before going ahead with such a step.

Thanks

Have you considered a lower cost or index fund instead? Balanced funds often provide an excellent one fund solution. There are challenges however. Often either stocks or bonds are not in a preferred account. A one fund solution can not be rebalanced or increase the bond portion over time should your asset allocation need to change. Often individual index funds may have lower costs.

[Ramjet]

What about using PSLDX in a sort of "Larry Portfolio"?

The original LP was something like SCV + Treasuries, and the idea was to use something with more potential gain (and the higher risk that goes with that) on the equity side, but in a smaller percentage (maybe 30/70 or 40/60). So could you use PSLDX + Treasuries instead? Wouldn't PSLDX fit the role of that "higher potential gain with higher volatility" side?

I'm just thinking out loud here.

If rates go up you would be hurt worse than if you held the standard Larry Portfolio or PSLDX in isolation

[GaryA505]

What about using PSLDX in a sort of "Larry Portfolio"?

The original LP was something like SCV + Treasuries, and the idea was to use something with more potential gain (and the higher risk that goes with that) on the equity side, but in a smaller percentage (maybe 30/70 or 40/60). So could you use PSLDX + Treasuries instead? Wouldn't PSLDX fit the role of that "higher potential gain with higher volatility" side?

I'm just thinking out loud here.

If rates go up you would be hurt worse than if you held the standard Larry Portfolio or PSLDX in isolation

In the case of rising rates, for the "standard" LP I can agree (assuming a LP of SCV/STT), but it seems like 100% PSLDX would be hurt more than 40/60 PSLDX/STT.

[jarjarM]

As we all know, there's no free lunch. What's the downside?

I asked the same question.
As someone explained, this fund would be a disaster if both stocks and safe bonds fell because he is leveraged on both.
But it's hard to see how they could fall together, maybe with a rising inflation.

There have been long periods of market conditions where the returns of a strategy like that of PSLDX would likely have barely matched a simple Total Stock Market fund (e.g. 1946 through 1964) or dramatically underperformed it (e.g. 1965 through 1981).

I backtested a rough approximation of PSLDX, and here's what the journey would have looked like from 1963 through 1992 compared to a simple investment in the S&P 500. Not pretty.

Vineviz, curious, how are you modeling PSLDX? Would like to run some scenarios myself. Thanks!

If we go thru a bond bear market like the 60s - early 80s, I expect any funds with leverage on the mid-long term bond side to decimated.

[kevinf]

As we all know, there's no free lunch. What's the downside?

I asked the same question.
As someone explained, this fund would be a disaster if both stocks and safe bonds fell because he is leveraged on both.
But it's hard to see how they could fall together, maybe with a rising inflation.

There have been long periods of market conditions where the returns of a strategy like that of PSLDX would likely have barely matched a simple Total Stock Market fund (e.g. 1946 through 1964) or dramatically underperformed it (e.g. 1965 through 1981).

I backtested a rough approximation of PSLDX, and here's what the journey would have looked like from 1963 through 1992 compared to a simple investment in the S&P 500. Not pretty.

Vineviz, curious, how are you modeling PSLDX? Would like to run some scenarios myself. Thanks!

If we go thru a bond bear market like the 60s - early 80s, I expect any funds with leverage on the mid-long term bond side to decimated.

PSLDX (approx) looks to be short by about $15,000 after a 28 year period versus the S&P 500 in that scenario (with the worst year at about $40,000 perhaps). That's slightly underwhelming rather than disastrous, though I'd certainly prefer the higher return :p

[UpsetRaptor]

There have been long periods of market conditions where the returns of a strategy like that of PSLDX would likely have barely matched a simple Total Stock Market fund (e.g. 1946 through 1964) or dramatically underperformed it (e.g. 1965 through 1981).

I backtested a rough approximation of PSLDX, and here's what the journey would have looked like from 1963 through 1992 compared to a simple investment in the S&P 500. Not pretty.

Wouldn't a better comparison be a 50:50 S&P500:Long-term-bond benchmark? If you're comparing a 100:100 fund to a 100:0 S&P500 benchmark, you're really just pointing out periods where bonds didn't do well. Which could happen, given current yields, but just saying.

[ChrisBenn]

There have been long periods of market conditions where the returns of a strategy like that of PSLDX would likely have barely matched a simple Total Stock Market fund (e.g. 1946 through 1964) or dramatically underperformed it (e.g. 1965 through 1981).

I backtested a rough approximation of PSLDX, and here's what the journey would have looked like from 1963 through 1992 compared to a simple investment in the S&P 500. Not pretty.

Wouldn't a better comparison be a 50:50 S&P500:Long-term-bond benchmark? If you're comparing a 100:100 fund to a 100:0 S&P500 benchmark, you're really just pointing out periods where bonds didn't do well. Which could happen, given current yields, but just saying.

I think 100:0 is the correct choice here (for this thread). Consider how people are using PSLDX (or looking to use it); it's typically as an equity replacement. I don't see anyone in the thread considering a 50:50 vs PSLDX.

Now to your point a 100:100 - libor is a better comparison; it is their official benchmark after all. Something like that is probably how the data was simmed. But unless you are looking at leverage on margin that isn't a helpful comparison for people considering this in their portfolio. PIMCO does market it as "StockPLUS".

I guess st dev could also be reported for the sim data. It would be left to the reader to determine what that (presumed) lower volatility was worth.

[GaryA505]

I for one would like to see the simulation of PSLDX vs 50:50. Just for the heck of it.

[Ciel]

I like the idea of this fund and it seems well executed. Ultimately, I decided it's not for me.

I'm curious though, for those who have a significant % of assets in this fund, what is your exit strategy?

[jarjarM]

I like the idea of this fund and it seems well executed. Ultimately, I decided it's not for me.

I'm curious though, for those who have a significant % of assets in this fund, what is your exit strategy?

When mid-long term bond return starting to crack under the pressure of inflation expectation and the fed decided to sit on the sideline. So far either is happening. Okay inflation expectation may have tick up a bit judging by the gold rush.

[JamesDean44]

I like the idea of this fund and it seems well executed. Ultimately, I decided it's not for me.

I'm curious though, for those who have a significant % of assets in this fund, what is your exit strategy?

When mid-long term bond return starting to crack under the pressure of inflation expectation and the fed decided to sit on the sideline. So far either is happening. Okay inflation expectation may have tick up a bit judging by the gold rush.

I plan to stay the course and rebalance as needed. I.e. no exit strategy.

[codoriti]

Are the bond yields going up what's slowing us down this week?

[jason2459]

Are the bond yields going up what's slowing us down this week?

Inflation did tick up slightly higher then expected last month and did tick up slightly the longer term yields.

[guyinlaw]

Are the bond yields going up what's slowing us down this week?

Inflation did tick up slightly higher then expected last month and did tick up slightly the longer term yields.

This week was record treasury sale, increased rates attracted more buyers . IMO rates will drop again as not much has changed. Fed has promised to keep rates low for many years and continues to buy corporate debt and mortgages.

[jason2459]

Are the bond yields going up what's slowing us down this week?

Inflation did tick up slightly higher then expected last month and did tick up slightly the longer term yields.

This week was record treasury sale, increased rates attracted more buyers . IMO rates will drop again as not much has changed. Fed has promised to keep rates low for many years and continues to buy corporate debt and mortgages.

They are slightly dropping today.

[Ramjet]

I'm curious though, for those who have a significant % of assets in this fund, what is your exit strategy?

Don't have an exit strategy and no plans to exit in the near term. If rates ticked up at a controlled/normal rate and then leveled out, this may set up better long term returns IMO (I don't think uncontrolled inflation is likely). You will get paid at that higher rate or better yet, rates may start to drop again. If I happen to hold this fund for 15+ years I will sell it in portions and replace with TSM because retirement will be around the corner

[DesertMan]

Dumb question: does PIMCO or someone else offer something like PSLDX with less long bond exposure?

[NMBob]

pspax pimco stockplus fund

bond maturity -
Range 1-3 Years 11.41%
Range 3-5 Years 18.58%
Range 5-7 Years 9.52%
Range 7-10 Years 8.25%
Range 10-15 Years 3.58%
Range 15-20 Years 2.37%
Range 20-30 Years 16.02%
Range Over 30 Years 11.09%

pstic - stockplus short fund
Range 1-3 Years 9.10%
Range 3-5 Years 19.79%
Range 5-7 Years 6.75%
Range 7-10 Years 16.89%
Range 10-15 Years 8.88%
Range 15-20 Years 8.96%
Range 20-30 Years 11.17%
Range Over 30 Years 15.93%

[moptop]

pspax pimco stockplus fund

bond maturity -
Range 1-3 Years 11.41%
Range 3-5 Years 18.58%
Range 5-7 Years 9.52%
Range 7-10 Years 8.25%
Range 10-15 Years 3.58%
Range 15-20 Years 2.37%
Range 20-30 Years 16.02%
Range Over 30 Years 11.09%

doesn't look like that performs near as well for the last 10 years. I basically mirrors the market.

[randyharris]

pspax pimco stockplus fund

bond maturity -
Range 1-3 Years 11.41%
Range 3-5 Years 18.58%
Range 5-7 Years 9.52%
Range 7-10 Years 8.25%
Range 10-15 Years 3.58%
Range 15-20 Years 2.37%
Range 20-30 Years 16.02%
Range Over 30 Years 11.09%

doesn't look like that performs near as well for the last 10 years. I basically mirrors the market.

Last 10 years of the market were unfriggin believably good.

[moptop]

pspax pimco stockplus fund

bond maturity -
Range 1-3 Years 11.41%
Range 3-5 Years 18.58%
Range 5-7 Years 9.52%
Range 7-10 Years 8.25%
Range 10-15 Years 3.58%
Range 15-20 Years 2.37%
Range 20-30 Years 16.02%
Range Over 30 Years 11.09%

doesn't look like that performs near as well for the last 10 years. I basically mirrors the market.

Last 10 years of the market were unfriggin believably good.

and PSLDX beat it by 327%

[columbia]

What is the intended purpose of PSPAX vs. s&p 500?

[NMBob]

https://www.pimco.com/en-us/investments ... s-strategy

[columbia]

That obviously hasn't worked out (aside from collecting high fees).

[guyinlaw]

That obviously hasn't worked out (aside from collecting high fees).

https://www.portfoliovisualizer.com/bac ... on2_2=100

Since 2007

Code: Select all

Portfolio	Start 	End         	CAGR	
PSLDX   	$10,000	$70,600 	16.34% 	
SPY	        $10,000	$28,901 	8.56% 	
60-40    	$10,000	$24,784 	7.28% 	

[RocketShipTech]

That obviously hasn't worked out (aside from collecting high fees).

The lowest fee class of the fund has worked out just fine:

https://www.portfoliovisualizer.com/fun ... mark=VFINX

[columbia]

That obviously hasn't worked out (aside from collecting high fees).

https://www.portfoliovisualizer.com/bac ... on2_2=100

I'm referring to PSPAX.

[columbia]

That obviously hasn't worked out (aside from collecting high fees).

The lowest fee class of the fund has worked out just fine:

https://www.portfoliovisualizer.com/fun ... mark=VFINX

Yes, that goes back further.

[guyinlaw]

That obviously hasn't worked out (aside from collecting high fees).

https://www.portfoliovisualizer.com/bac ... on2_2=100

I'm referring to PSPAX.

PSPAX and PSLDX are very different..

PSPAX bonds have av duration of 0.61y, short term bonds are like holding cash. PSLDX bonds have av duration of 15.92y.

[DesertMan]

That obviously hasn't worked out (aside from collecting high fees).

https://www.portfoliovisualizer.com/bac ... on2_2=100

I'm referring to PSPAX.

PSPAX and PSLDX are very different..

PSPAX bonds have av duration of 0.61y, short term bonds are like holding cash. PSLDX bonds have av duration of 15.92y.

Too bad they don't have an intermediate duration version, it seems. Seeing as yields are so low, I don't think PSLDX will be able to continue to deliver monster outperformance.

[InvestInPasta]

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