The above is a good discussion and why I keep trading bond funds. If you own higher-rated bond funds you are likely to make 2.5-3% average annually in the next several years.
Trading should not be done by most investors though ;-)

Well, consider this, maybe: I'm retired, wife's not. (That's how we can make expensive Hawaii work for us.) 4% is the figure that might work for us, as long as it amounts to the year's profit we remove from the portfolio, each January--- because, as long as the Market continues to rise, we'll make up that 4% and it will bring the portfolio back up to where it was, LAST January, before the withdrawal. So, we are not "spending down" the principal in the portfolio. I want to leave something behind. She's 19 years younger, and there is my son and her brothers to think about.
We're 36 stocks and 57 bonds and the rest in cash. That recipe is an aggregate of the fund managers' decisions. Of course WE are the ones who decided to be bond-heavy, now. We hold one equity fund (balanced, really) PRWCX, which comprises over 30% of our total. The fund is golden. It's closed, now. Because it's such a sizeable chunk of the portfolio, it produces profit in good years that's rather much higher than our other stuff. We take that 4% from THERE, not from our bond funds.
...WE might decide in days to come to begin to take the bond distributions and use them, but not yet. PRSNX RPSIX and PTIAX. I'm less than pleased with RPSIX, so on Friday last, I transferred a good chunk into PRSNX. These days, our monthly bond pay-outs amount to $300 in a good month. I want to keep growing that until it's worth much more. We have monthly automatic payments going into PTIAX. So we still re-invest all bond dividends. We take 4% (or so) yearly, but do not spend-down what's in the portfolio. We can have our cake and eat it, too.

Different types of risk are defined along with metrics from Mutual Fund Observer and Morningstar.
Fifty funds are evaluated over 20, 15, 10, 5, and 2 year periods for maximum drawdown, risk adjusted return (Martin Ratio), risk (Ulcer Index), and total return.
Short term performance for these funds are evaluated over one week, three months and year to date, along with 3 year beta.
Portfolio Visualizer is used to create a portfolio to minimize drawdown for an annualized return of 8% for the past two years.

50 Funds

Here's a table (data from M*) comparing the 3/5/10 year standard deviations of several of the funds listed. I've divided it into funds with high grade portfolios and funds holding substantial amounts of junk bonds. Not surprisingly, over every time period the latter have been more volatile regardless of differences in durations.
You can reproduce this data by starting with the M* legacy ratings & risk page for WATFX and then adding (using "Compare") the tickers for your funds of interest:

Fund	3yr	5yr	10yr
DODIX	3.62	3.26	2.93
WATFX	4.00	3.63	3.22
BCOIX	4.11	3.64	3.30
----------------------------
PTIAX	4.65	3.87	3.47
TSIIX	4.92	4.25	4.05
PIMIX   5.58	4.52	4.21

As @hank wrote (third paragraph, above), the funds with better short term performance tended to hold lower quality bonds. Most multi-sector bonds, including the ones above, have average credit ratings of BB. The core plus bonds above (DODIX, BCOIX) are rated A, the core bond fund WATFX is rated AA.
Buying into junk bonds, especially with cash, is a bet that the economy won't sink into a recession, or if it does, the government will bail out companies that were already shaky.
Here's a table showing past performance other than very short term. I've added a column, 3yr(2019) that gives annualized performance figures over the period 2017-2019. That gives a sense of more recent multi-year performance while excluding the unusual ups and downs of 2020.
As above, the table is divided into funds with high grade and with junk bond portfolios. Over extended periods or periods excluding 2020, higher risk (junk) has done better. Over the past year or three years if one includes 2020, it has not.

Fund	YTD	1yr	3yr	3yr(2019)  5yr	 10yr
WATFX	6.63%	7.56%	5.56%	4.91%	  4.95%	 4.53%
BCOIX	7.02%	7.70%	5.55%	4.66%	  4.92%	 4.50%
DODIX	6.73%	7.40%	5.39%	4.52%	  4.98%	 4.34%
------------------------------------------------------
TSIIX	5.71%	6.71%	4.85%	4.94%	  5.32%	 5.42%
PTIAX	3.34%	3.42%	4.49%	5.45%	  5.05%	 5.83%
PIMIX   1.54%	3.38%	3.57%	5.68%	  5.26%	 6.86%

Your home may not be a great investment but it is certainly a decent investment, comparable to safer investments in returns. Some people get lucky and buy homes at a great price or in neighborhoods that spike in value, but that’s often not the case.
We bought our home with a 15-year mortgage and paid it off about five years before retirement. Having our mortgage paid off made a huge difference in being able to retire when we did because our living expenses were so much lower. It also enabled us to ramp up our retirement savings the last few years of working.
Owning a home has many intangible values, if your neighborhood is desirable and you enjoy working in the yard or doing home improvements. For example, we live next a large city nature preserve where we can hike and walk the dog. On the downside, you never really pay off a home because of ongoing maintenance and repairs.

@BenWP, that's an excellent point about checking the total assets for which the manager has responsibility. In addition to other funds (to its credit, M* appears to list offshore as well as domestic funds), managers may also be responsible for private institutional/wealthy client accounts and/or pooled investment vehicles. You can find that information in the SAI.
"5 [other funds] $4.8 billion; 21 [pooled investments] $21.8 billion; 243 [other accounts] $2.5 billion"
(That's in addition to the $6B in MGGPX.)
M* analyst reports sometimes give a little more information: "in 2006, the firm entrusted him to launch the Global Opportunities strategies and form his own team in Hong Kong. ... After adding two more funds to their coverage in 2020, the seven-person outfit now manages seven strategies. The supporting cast also lacks notable shared tenure ..."
Something else (if one wants to get really deep into the details) is how much overlap there is in the different charges. For example, years ago, Fidelity closed Contra FCNTX (Danoff) while keeping open the much smaller New Insights (FINSX). While the funds focused on similar parts of the market, the size difference was so huge that New Insights was able to benefit from smaller companies that Contra couldn't touch, at least in any meaningful way.
All that said, I agree it would make sense for MS to consider closing some of the sibling funds also.

The single biggest variable longer term IMHO on bond funds is fees. Especially today, investment grade bond funds aren’t going to produce large returns (consistently anyway) without taking a large amount of risk. So, fee differences mean more with bond funds than with equity funds.
At .45% ER, WATFX is competitive on fees along with DODIX. Generally, that’s a low or reasonable fee for a core managed bond fund. The best source I know of on bond funds‘ holdings and performance history is Yahoo. I’ve entered your fund there and than clicked on:
“Holdings”
For interest rate sensitivity, look at “Duration” on the right. The fund is at 7 years on duration, a bit on the long side by today’s (cautious) standards - even for an intermediate term fund. By contrast, DODIX (mentioned in this thread) is a bit over 4 years on duration. WATFX should have fallen a few percent over the past 3 weeks as rates spiked. The benchmark 10-year bond‘s rate rose from below 0.60% a few weeks ago to 0.80%% today. (Rates up. Bond prices down.) The longer the duration, the more drastic the move. On the good side, your fund should be able to reinvest maturing issues at higher interest rates which will feed back into your proceeds. A caveat, however, is that investors might choose to flee. In that case, it’s harder for the fund to “self-correct”.
A second important ingredient in bond performance is credit quality. It looks like WATFX is weighted toward the middle or upper range relative to its peers. Ironically, it’s been the lower rated bonds (BB / BBB) that have had the nicest ride up in value since March due to the unprecedented actions of the Federal Reserve in buying-up (essentially backing) corporate bonds as low as BBB quality before they could fall further into junk (BB) territory. Nobody could have foreseen that action on the part of the Fed. Likely, this sharp uptick in value for lower rated bonds is temporary. But that, along with the longer than average duration, helps explain a lot about your fund’s recent behavior.
Rather than comparing performance (“chasing” per msf) I’d recommend thinking about the type of bond fund that best fits your long term style of investing and overall portfolio. What you have now is a core fund, weighted a bit on the long end of duration and hewing toward the higher quality end of the credit spectrum. The biggest advantage is it should help hedge equity losses in the future, as high quality longer duration bonds tend to rise a bit when equities tumble (though that wasn’t the case last week). Longer dated bonds also command higher rates of return. Your fund invests in higher quality credits. So, should junk and lower quality bonds decline, your fund should stand up better.
Bonds today really represent a “Catch-22.” Rates are so low that it’s unlikely bonds will reward investors for the risk they’re taking for a good many years and until rates are significantly higher. But that’s just a guess on my part. The experts have been predicting the “end of time” for bonds for at least the last decade. Generally, they’ve been wrong in that assessment. I’m 74 and retired. I certainly don’t want 100% invested in equities. Nor do I want to play much in the junk bond area. So, somewhat begrudgingly, I have about a quarter of assets in intermediate duration investment grade bond funds. A younger investor need not be as cautious.
Good luck.

Global Franchise is also a good one of theirs, if memory serves.
Need to be careful on any loads or 12(b)-1 fees, though.

I haven't found any way as a retail investor to invest in a MS share class that doesn't have a 12b-1 fee, unless I can pony up $5M (e.g. at Fidelity or at Vanguard).
Even with the fees, the total cost of ownership is not out of line (M* rates it average). I'm just wondering if you've got any workaround on the 12b-1 fees. Or does one need to invest through one's employer's plan to get a break?

WATFX has had some poor days.
This sounds more like performance chasing than a fundamental reason to change horses. It has lost 1% in the past three months. About 1/2% worse than DODIX, and still in the middle quintile (barely, at 59th percentile) of its peers.
Rather than jumping at particular funds, I suggest thinking first about the type of fund you want to own. WATFX is an excellent vanilla bond fund; if that's the type of fund you want, I wouldn't switch. DODIX (and I'll add BCOIX) are great core plus funds. That means that they add a fair amount of junk bonds, which have higher yields but also tend to move more like stocks. PIMIX is a multisector fund. These funds tend to have even more junk and may dabble in international bonds.
PIMCO funds, virtually all of them, are off in their own world and it's difficult to say exactly what they're doing at any given instant. M* likes PIMIX, describing the fund as one that "stands out for historically large positions in nonagency mortgages, which have helped drive strong performance in a variety of different market environments. It also buys corporate debt, and emerging-markets and developed foreign sovereign debt, with a sprinkling of non-U.S. dollar currency bets."
https://www.morningstar.com/articles/945813/do-you-need-a-multisector-bond-fund
Many people here are comfortable with this. The question is, are you? You'd be switching from a vanilla, high credit quality bond fund, albeit a relatively racy one (above average risk), assuming any vanilla bond fund can be called racy.
Here are a couple of graphs that may help to illustrate what I mean about performance chasing and risks:
Performance since 8/10/20 (WATFX's peak for the year, I believe)
Notice that the core fund (WATFX), core plus funds (DODIX, BCOIX), and market average (US Aggregate index) tend to track together. So does the multisector fund PDIIX, though with wider swings both up and down. But PIMIX goes its own way.
Now zoom out to YTD (click on the YTD link in the graph). You'll see that both the PIMCO funds take on a lot more risk - a huge dip in March, relative to the other funds. Over the long term, risk usually pays off. But that line of reasoning also suggests paying less attention to short term movements.
Here's a second graph, same funds, this one for the three year period before 2020 (2017-2019). It shows both PIMCO multisector funds outperforming. Notice that aside from separating a bit, all the funds still tend to track together except PIMIX. It diverges in the summer of 2019, with performance dropping from that of PDIIX to that of the more conservative funds.
My suggestion is to think first about what kind of fund you want to own. You might still wind up investing in PIMIX, but it will be for reasons beyond its performance over the past couple of months.
Side note: PIMIX is available with a $25K min at Vanguard and a $2500 min at Schwab.

As of 10/31/2020, my Challenge "Retirement Portfolio" has total value of $1,073,493, for a YTD total return of 7.35%:
PIMIX----- $212,055-----19.7%
TMSRX-----212,985-----19.8
TSIIX-----218,534-----20.4
VLAIX-----429,919-----40.1
Total----- $1,073,493-----100.0%
Fred

31 October 2020
Portfolio summary
20,000 shares of FUAMX. $237,800.
2,000. IGOV. $105,940.
10,000. SGOL. $180,500.
7,000 SGGDX $183,960.
1,500. FSUTX. $131,985.
10,000. FLOWX. $120,700.
Cash. FDLXX $ 91,576.75
Total. $1,052,461.75
John

I own MSFBX no load/ntf at Fidelity and Schwab. E/R is 1.19% . 35% is invested in the Consumer Defensive category, and lost under 30% in 2008.

I think replacing VLSIX with RLSFX may help with the "minimum drawdown" aspect, at least based on their short-term history.

I replaced VLSIX with RLSFX and the results were worse for performance and SD. See (link)

First, I don't list all my funds and I don't follow all the funds.
Second, I list the ones that have done better for 1-3 months but still make some choices.
PIMIX is on the list under Multi.
WATFX is a good fund but I prefer GIBLX which is better for 1-5 years.
Your question is more complicated. What kind of investor are you? do you need a ballast fund? is it for 3 months or 3 years? are you retired? how much risk/volatility you want to take? how the other portion of your portfolio look like
Sure, PIMIX did better than WATFX last month because rates were up and Multi did better.
You need to tell me a lot more before I can post my ideas.
PIMIX is a pretty good fund but used to be a great fund until 01/2018. I prefer TSIIX for longer hold. If you need more ballast, I like PTIAX.

Since 01/2019, the above funds made 8.5% + SD=2. See (link)
VLSIX is the one that limits it.
But I can do even better with BIL=40% + IQDAX=30% + VLSIX=30% and make 12.6% + SD=3.55(still low)

Happy Halloween experts!
Just for entertainment purposes only and to maybe provide for good debate and ideas to the class going forward...provide your best 5 fund portfolio, minimum of 8% return, minimum drawdown to be held for the next 12-36 months...
I'll start, FWIW and again, for entertainment purposes only.
VLSIX KAR Long/Short, 15%
TMSRX, T Rowe Price Mult Strat Total Return, 5%
IQDAX, Q Infinity, 30%
ARBIX, Absolute Convertible Arbitrage, 10%
BIL, ETF, 1-3 Month TBills, 40%
Ideas/Thoughts....what say you experts, c'mon FD1K, whatda got?
Best,
Baseball_Fan

Hi Catch -
When I need a quick “reality check” I sometimes pull up the DJI or similar chart. Of course, experienced market watchers know that the Dow is hardly representative of the broader market. In yesterday’s case, the quick glance was enough to convince me that equities aren’t the “screaming buy” they were in back March. So, I didn’t succumb to the temptation to throw money at the beast.
A surprise yesterday was that DODBX gained 0.35% in what was overall a falling market. Worth noting : HY and shorter maturities held up pretty well, while long-term rates rose enough to help the banks and other financials.
Yes, I hear there’s snow forecast for Sunday in northern Michigan, followed by a warming trend.

Observations for one month as of 10/30/2020:
October was not a good month for stocks and most bonds (Interest rates were up). High rated bonds were down for 1 and 3 months. The best bond categories have been Multi+Non Trad.
Multi: 0.1% for the month but securitized shined again(IOFIX,DHEAX). HOBIX with 1%.
Uncontrain/Nontrad: +0.2 for the month. Securitized(JASVX) did better at 0.8%
HY Munis: (-0.3) for the month but BSNIX(new fund from Baird) has done better all year.
High Rated Bonds: (-0.3%) for the month. The index BND -0.56%
Bank loans: Flat but EIFAX +0.3%.
HY+EM: HY 0.25 and EM= +0.1 for the month and this time no correlation to stocks.
Corp: -0.2% for the month. PIGIX -0.5%.
SP500(SPY) Down month at -2.5, YTD=2.9%.
PCI CEF (-5.1%) for the month. YTD still at -18.1%
My own portfolio
I started the month with IOFIX+JASVX (both securitized) + NHMAX(HY Muni). Early in the month sold NHMAX and bought HOBIX. It’s pretty obvious that funds loaded with securitized bonds are doing well. HOBIX continues to have good performance for 1-3 months. It was another good month for me, even last week I made 0.1%.
In the last week of October I sold most of my portfolio for the third time this year. When VIX goes above 30-35 and both stocks+most bonds categories are going down it’s a good sign for me to sell. Since I retired in 2018 I don’t see any reason to be invested when markets crash. I can be out until markets look better. Sure, sometimes it’s just a false alarm but I rather be out. It works well with my trading style and not recommended for anybody else.

Diversification didn’t help you much in October. SPY down -2.5%, FSPSX(International index) -4%, BND -0.56%

PSSAX has beaten SH by a significant margin. For a while I thought it was just the bond portfolio aspect of it, but I don't think it's just that anymore, maybe something also to do with how they trade futures.

It might be trading or it might just be the level of equity exposure.
For simplicity, assume bond returns are fairly stable. They certainly should be relative to equities. This assumption lets us view 100% of the volatility as equity-based. PSSAX is about 8% less volatile than SH. 3/5/10 year standard deviations are 14.93/12.52/11.22 vs 16.35/13.68/12.42. Capture ratios are consistent with this observation.
Just eyeballing the graphs, it looks like they might be much closer if one adjusted SH's beta (e.g. by multiplying SH's changes by 92% or so) and adding a relatively constant bond performance kicker (say, 1% - 2%).
Assuming my quick and dirty black box guesstimates are close to the mark, the question then becomes: how/why does PSSAX have less equity exposure than SH?
I had thought that PSSAX was just like others of its ilk, like DSENX, PSTKX, etc. Those funds target 100% equity exposure via derivatives, and then add bond exposure. For example, the PIMCO prospectus section describing PSTKX reads:

The Fund typically will seek to gain long exposure to its benchmark index in an amount, under normal circumstances, approximately equal to the Fund’s net assets. However, S&P 500 Index derivatives may be purchased with a fraction of the assets that would be needed to purchase the equity securities directly, so that the remainder of the assets may be invested in Fixed Income instruments.

Unlike these funds, and unlike SH, PSSAX does not aim for 100% (actually negative 100%) equity exposure. Its prospectus reads:

While the Fund will, under normal circumstances, invest primarily in Index short positions backed by a portfolio of Fixed Income Instruments, PIMCO may reduce the Fund’s exposure to Index short positions when PIMCO deems it appropriate to do so. Additionally, the Fund may purchase call options on Index futures contracts or on other similar Index derivatives in an effort to limit the total potential decline in the Fund’s net asset value during a market in which prices of securities are rising or expected to rise.

So, according to the prospectus PIMCO is actively managing the equity side as well as the bond side of the fund. I'm still guessing that this is largely macro market timing and not individual issue selection, but one would need to dig through the (semi)annual statements to verify that.

@Gary1952 Did you enjoy the multi-trillion dollar government stock market bailout via socialism this year that saved your portfolio?