Pimco PONDX increasing fee in 3 weeks - stay in?

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CenTexan
Posts: 14
Joined: Wed Jun 07, 2017 8:02 pm

Pimco PONDX increasing fee in 3 weeks - stay in?

Post by CenTexan » Wed Sep 13, 2017 8:54 am

Received a doc that my PONDX fund is increasing their fees (for Class D shares) by 0.11% on October 2. (Wow - a 3 week notice - thanks, PIMCO!) That brings the ER to 0.9%. I sure don't pay that much for any of my other funds.

Interested to know what others think about this.

Here's the full text (sorry about the formatting):

PIMCO Funds
Supplement Dated August 31, 2017 to the
Credit Bond Funds Prospectus dated July 28, 2017,
as supplemented from time to time (the “Prospectus”);
and to the Statement of Additional Information dated July 28, 2017,
as supplemented from time to time (the “SAI”)
Disclosure Related to the PIMCO Income Fund (the “Fund”)

Effective October 2, 2017, the supervisory and administrative fee for Institutional Class, Class P,
Administrative Class, Class A, Class C and Class R shares of the Fund, stated as a percentage of the Fund’s
average daily net assets, will increase by 0.05%, and the supervisory and administrative fee for Class D shares
of the Fund, stated as a percentage of the Fund’s average daily net assets, will increase by 0.11%. These
supervisory and administrative fee increases will result in the Management Fees increasing by 0.05% for
Institutional Class, Class P, Administrative Class, Class A, Class C and Class R shares of the Fund and by
0.11% for Class D shares of the Fund.

Accordingly, effective October 2, 2017, in the Prospectus, corresponding changes are made to the Fund’s
Annual Fund Operating Expenses table and the Expense Examples following the table in the “Fund Summaries”
section, and to the “Management of the Funds—Management Fees—Management Fee” and “Management of the
Funds—Management Fees—Supervisory and Administrative Fee” sections. In addition, effective October 2,
2017, in the SAI, corresponding changes are made to the “Management of the Trust—Supervisory and
Administrative Fee Rates” section.

Investors Should Retain This Supplement for Future Reference
PIMCO_SUPP3_083117

TIAX
Posts: 822
Joined: Sat Jan 11, 2014 12:19 pm

Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by TIAX » Wed Sep 13, 2017 9:02 am

It didn't make sense at .79 and it certainly doesn't make sense at .90. Depending on the capital gains, I would sell (and leave your advisor if you're with an advisor).

Jack FFR1846
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Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by Jack FFR1846 » Wed Sep 13, 2017 9:11 am

I guess this would depend. If this were the lowest ER fund in your 401k and remained the best fund in your 401k, then stick with it. Otherwise, that already was an outrageously expensive fund that I would have sold long ago.
Bogle: Smart Beta is stupid

TBillT
Posts: 273
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Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by TBillT » Wed Sep 13, 2017 9:25 am

Do me a favor and go to Morningstar.com and look at performance and ratings.
On the growth chart compare to VWINX Wellesley.
We have a 5-star fund rated at Below Average cost performing extremely well.
You could also chat on the Morningstar site to see if others or Morningstar itself are concerned.

Thank you for bringing this to my attention, but frankly I probably would not have noticed.
The issue with PONDX is approaching $100-bill and it is hard to keep up such performance at the size.
Does seem funny M* says Below Average cost (mistake?), but if that's true you need to be perhaps less purist on fees.

I do check my funds and once in a while, and shift out if I think performance is falling off.
PONDX is my biggest holding in my Fido so that tells you I have promoted it to top dog in my bond fund line up over there

Uniballer
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Joined: Thu Apr 20, 2017 9:55 am

Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by Uniballer » Wed Sep 13, 2017 9:40 am

FYI - Vanguard will let you buy PIMIX (Pimco Income Institutional) with a minimum investment of 25K. ER is currently 0.48%, and will go up 0.05% to 0.53%.

It appears that Fidelity will let you buy PIMIX with a 100K minimum.

Apparently Schwab also lets you buy PIMIX. It is unclear to me if there is any minimum there...
Last edited by Uniballer on Wed Sep 13, 2017 4:45 pm, edited 3 times in total.

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Iliketoridemybike
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Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by Iliketoridemybike » Wed Sep 13, 2017 9:49 am

PONDX isn't trying to follow an index so the cost is less of a factor. In situations outside of an index fund I am willing to give a fund a little more rope if the after expense performance is superior and PONDX has been rock solid for the intent that I bought it.
Living the dream

CenTexan
Posts: 14
Joined: Wed Jun 07, 2017 8:02 pm

Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by CenTexan » Wed Sep 13, 2017 4:41 pm

Thanks, folks. Anyway I look at it, PONDX is performing well. I've only had it a few months so I think I'll bite my lip and accept the increase in ER and decide at the one-year mark.

I don't see how you can compare Vang Wellesley (VWIAX) to PONDX . . . a third of Wellesley is in stocks . . . (and I already have a large amount of VWIAX).

tj
Posts: 1901
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Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by tj » Wed Sep 13, 2017 6:23 pm

Why do own pondx rather than pimix?

JBTX
Posts: 964
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Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by JBTX » Wed Sep 13, 2017 6:35 pm

Pondx has bet big on non guaranteed residential mortgages, including subprime. That is about 30% of their portfolio.

They made a good call and got into an undervalued area and rode it back up. The question is can they keep doing this?

ResearchMed
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Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by ResearchMed » Wed Sep 13, 2017 6:37 pm

tj wrote:
Wed Sep 13, 2017 6:23 pm
Why do own pondx rather than pimix?
PONDX has a lower minimum investment.

But at Vanguard, one can get into PIMIX with just a $25k minimum to start, rather than something like $100k.

RM
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nervouscorps
Posts: 21
Joined: Sun Jan 05, 2014 8:01 pm

Re: Pimco PONDX increasing fee in 3 weeks - stay in?

Post by nervouscorps » Wed Sep 13, 2017 6:52 pm

I just bought this fund the day before this was announced if you can believe it. I'll probably stay in though.

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