How TIAA-CREF Bond Fund Beats Competition Interesting choice. It looks like you've highlighted the key difference between the two funds. Though I might add that as a consequence, DBLFX's broad allocations (government, corporate, securitized) hew much more closely to that of the typical fund.
It may come down to what you think of Treasuries. Bogle is not a lover of Treasuries, having stated that the index is too heavily weighted that way. On the other hand, Buffett has suggested that his heir divide investments between an S&P 500 index fund and short term Treasuries.
Personally, I prefer underweighting. Long term treasuries are IMHO only good for speculating on interest rates (1/6 of DBLTX's mature in over 25
years). Short term, and currently intermediate, Treasuries yield so little that they're effectively cash. (They yield as little or less than an individual investor could get insured in a bank account.)
Also, when I buy an actively managed fund, I look for a fund where the managers take positions that deviate significantly from the herd. Maybe Gundlach has with this fund; all I'm looking at is the current snapshot in time. He certainly does go his own way with some of his funds.
Disclaimer: I think that he is very sharp, though not as sharp as
he thinks himself. So I expect this fund to be well managed and worth owning. Beyond that I can't say.
How TIAA-CREF Bond Fund Beats Competition Thanks, but I'll take BCOIX over this fund.
Nearly identical in most metrics (duration, credit quality, credit breakdown, number of bonds/bonds in top 10%, country breakdown). TIORX is long and short in cash, but with same net cash as BCOIX (no shorts).
Differences that pop out include:
- TIORX has more securitized bonds and less corporate (as discussed in article)
- TIORX has high turnover (308%, mentioned in article) vs. 34%
- TIORX costs twice as much (0.62% vs. 0.30%)
- TIORX has lower SEC yield (2.31% vs. 2.61%)
With the notable exception of 2008, BCOIX generally outperforms. In 2008 it underperformed by 4.64%, but made that up and more with its 2009 9.08% outperformance. In all other recent years, performance figures were much closer.
It is fair to look back this far, as BCOIX's management started in 2000. Though the article implies that Higgins (starting in 2011) is the only manager of TIORX, the prospectus says: "The following persons manage the Fund on a day-to-day basis: ...Higgins ... since 2011 [and] ... Cerra ... since 2003." Both are listed as "Managing Directors". Neither the prospectus nor M* says anything about 13 managers.
msf,
BCOIX over DBLFX (less Corportate Bond and more US Treasury)?
Mona
Lewis Braham: Vanguard's Climate-Change Dismissal To paraphrase: Vanguard knows better than its shareholders what is in their best interest.
How patronizing.
When Vanguard says that it must maximize returns, is that returns over the next quarter, or over the next decade? Penny wise and pound foolish comes to mind.
Vanguard seems to be saying that it is
required to vote this way to meet its fiduciary duties. It is thus tacitly accusing Allianz, Wells Fargo, DWS, Schroeder (which submanages VINEX and VWIGX), and others of breach of fiduciary duty.
http://www.ecowatch.com/is-your-mutual-fund-a-climate-change-denier-or-climate-champion-1882190571.html(The figures in the article linked to above show that exact voting percentages depend on how you count. Nevertheless, the split among fund companies is clear. Thanks to Lewis for the info on Blackrock's change of heart, since its 2015 voting performance was 0%.)
It gets worse. From a
2014 article (writing about 2014 and earlier votes):
"Industry giant Vanguard remains
sole mutual fund to ignore climate-related resolutions for 11th-straight year. ... Vanguard ... has
failed to cast a single vote in support of a climate-related resolution in 11
years."
How TIAA-CREF Bond Fund Beats Competition Thanks, but I'll take BCOIX over this fund.
Nearly identical in most metrics (duration, credit quality, credit breakdown, number of bonds/bonds in top 10%, country breakdown). TIORX is long and short in cash, but with same net cash as BCOIX (no shorts).
Differences that pop out include:
- TIORX has more securitized bonds and less corporate (as discussed in article)
- TIORX has high turnover (308%, mentioned in article) vs. 34%
- TIORX costs twice as much (0.62% vs. 0.30%)
- TIORX has lower SEC yield (2.31% vs. 2.61%)
With the notable exception of 2008, BCOIX generally outperforms. In 2008 it underperformed by 4.64%, but made that up and more with its 2009 9.08% outperformance. In all other recent years, performance figures were much closer.
It is fair to look back this far, as BCOIX's management started in 2000. Though the article implies that Higgins (starting in 2011) is the only manager of TIORX, the prospectus says: "The following persons manage the Fund on a day-to-day basis: ...Higgins ... since 2011 [and] ... Cerra ... since 2003." Both are listed as "Managing Directors". Neither the prospectus nor M* says anything about 13 managers.
Synthetic Investments Not exactly an answer to your question but "lower returns going forward" seems to be the latest buzz phrase. Actually has been around many years and popularized by the likes of Jeremy Grantham long ago and others (especially value managers) Last year's punk returns really had them howling the era of low returns was upon us. But last I checked the market was still powering ahead and at all time highs. Sort of reminds me of post 2008 when a bunch of funds were rolled out pandering to the fears of another 2008. Now I guess the marketing machines will be pandering to the low returns going forward fears. As an aside, your aforementioned MWATX (not MWTAX) looks good and has performed well over the years - certainly no low returns in that fund.
Small-Cap Stocks Are On A Roll Hi
@MikeW,
Thanks for the question.
For me, I am thinking of again rebalancing my portfolio and trimming back my allocation in equities. According to last Friday edition (July ending) of the WSJ the S&P 500 Index is selling at a TTM P/E Ratio of 25.0. For me, most equities are too richly priced for me to even think of adding to current positions (much less opening new positions) as I am in the trim mode keeping equities at about 45% of my asset allocation.
Now, if we should get a good pullback (10% range) in the near term I most likely will become a buyer in equities and add to some current positions; and, then perhaps after the rebound lighten up in some other positions. With this, a rebalance within my equity allocation itself.
Thus far, PMDAX has been a great fund for me; and, one that I have owned for about five
years. It makes up about 60% of my small/mid cap sleeve found in the growth area of my portfolio. The other two small/mid cap funds that I own in this sleeve are ABSAX and PCVAX.
