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For the full period, 7.65%. Definitely acceptable.
YTD 3yr 5yr 10yr 15 yr
5.40% 10.55% 7.2% 7.2% 8.3%
Liquidity is always challenging for institutional bond buyers outside of Treasuries and the largest corporate debt issuers. “When I look at what’s going on in the ETF space in terms of very illiquid investments making their way into daily liquid ETFs”—collateralized loan obligations, complex option strategies, private investments—“I’m concerned,” says Daniel Ivascyn, manager of the $188 billion Pimco Income mutual fund.
He also manages the $6 billion Pimco Multisector Bond Active ETF, though he stresses that the mutual fund “is a highly flexible strategy, very tactical, very active.” The ETF’s strategy is longer-term-oriented. Its expense ratio of 0.55% is lower than the 0.90% charged by the mutual fund’s retail A-share class.
Ivascyn’s team has long profited from its bets on securitized mortgage and consumer debt—home, auto, and credit-card loans bundled as tradable securities. The ETF has a 40% weighting in such debt, according to Morningstar. “We know that government balance sheets have weakened considerably [since the 2008-09 crash], and corporate balance sheets have deteriorated,” he says. “But the consumer balance sheet has only improved.”
There are other sectors worth exploring today, Ivascyn says, especially overseas, where investors can find not only better yields but also cheap currencies relative to the dollar. Although he thinks the road will be bumpy, over the next five years, he says, “one of our highest conviction views would be dollar weakness.”
For the 35-year history ended December 2024, they found that US equities outperformed non-US developed markets by 4.7% per year, with 3.8% attributed to relative valuation expansion, 1.1% to real EPS growth, negative 0.6% to dividend yield differential, and negative 0.3% to real interest rate differential.
They found that to justify current valuations, US equities would need 2.2% higher annual real earnings growth than non-US peers over the next decade—well above the historical 0.3% edge.
Well, what's it all about? I suppose it depends on your feelings about recency bias vs. mean reversion. After all, US indexes are setting records ain't they?From the end of 2008 through 2024, the US dollar rose in value relative to the euro from 0.72 to 0.92, an increase of almost 29%.
Well, he's one of the folks auditioning for the top job over there, so he's gotta appeal to the desires of Emperor Hirocheeto in his public remarks...Federal Reserve’s Waller says central bank should cut rates at next meeting
”A top Federal Reserve official said late Thursday that the central bank should cut its key interest rate later this month, carving out a different view than that of Chair Jerome Powell, who has been harshly criticized by the White House for delaying rate cuts.”
”Waller, a Trump appointee, has previously said that he would support a rate cut in July. Michelle Bowman, also a Trump appointee, has also spoken in favor of a cut. Minutes to the Fed’s June 17-18 meeting said that only “a couple” of the 19 members of the central bank’s interest-rate setting committee supported a cut in July.”
Suppose it’s happened before, but I can’t ever recall a member of the FOMC speaking out vociferously like this against the prevailing committee sentiment and (presumably) the position of the current Chair.
I've been known to post things to bump the conversation along. :) Plus, you find out who reads the links. ;)WABAC,
Ben states that research proves that you should be fully invested, use index funds and asset allocation to match risk profile. Of course I don’t listen to that after getting burned 45%, 50%, 25% in 2000, 2008, 2020, etc.
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