This question is on behalf of someone related to my in-laws. For some reason that individual can (seriously?) only invest with PIMCO. So I looked for a place to keep uninvested cash at PIMCO. I found "Government Money Market" but it does not have D shares. There is however a Short-Term (PSHDX) and a Low Duration (PLDDX) fund both having D class shares. Now the former is UltraShort Bond while later is Short Bond but managed by Bill Gross.
I'm thinking PLDDX is worth the "risk" as long as there really isn't any true money market fund available retail at PIMCO. Any advice would be extremely helpful before I provide advice I hopefully don't regret (I genuinely love my in-laws).
Comments
Disclosure: We do hold PLDDX.
My inflation adjusted 2 cents worth.
Regards,
Catch
David
One note regarding the person's investments, is whether the acct. is sheltered (401k, IRA, etc.); as PLDDX (437%) and some other Pimco funds have hefty turnover rates which could have a negative impact on non-sheltered tax returns.
Regarding PIMCO Short Asset, the bigger endorsement I feel is Gross does not manage the fund yet says that's where he is parking his cash. I wouldn't have thought it is more conservative than PSHDX, but it seems like it.
You're right, of course.
And yet...
I think that to invest in a fund like RPHYX or PAIUX, you need to have a three month or less horizon. If so, you definitely need a "cash" fund.
But if your time line is more reasonable, like two years, then hard to reconcile not going with a solid fixed income fund, like RNSIX or PONDX or DODIX.
Through market bulls and bears, DODIX, for example, has never lost more than 3% in a single calendar year, and yet it has earned much more in any two-year period. Here's tally of annual returns since 1989:
YTD 6.2%
2011 4.8%
2010 7.2%
2009 16.1%
2008 -0.3%
2007 4.7%
2006 5.3%
2005 2.0%
2004 3.6%
2003 6.0%
2002 10.8%
2001 10.3%
2000 10.7%
1999 -0.8%
1998 8.1%
1997 10.0%
1996 3.6%
1995 20.2%
1994 -2.9%
1993 11.3%
1992 7.8%
1991 17.9%
1990 7.4%
1989 11.5%
Besides the big 3 (Fido, Vanguard, TRP), anyone know broad based company with substantial fixed income offerings? American Century maybe? How about Manning & Napier?
Did you know that Gross once ran three marathons in three consecutive days?
There is a very poignant scene at the end of the book by WSJ reporter Scott Patterson, called "The Quants," where Gross and Ed Thorpe meet at PIMCO headquarters in Newport Beach and reminisce about their professional beginnings.
Thorpe is the legendary professor, hedge fund manager, and author of "Beat The Dealer" and "Beat The Market."
"The Quants," recommended by our own scott, is a fantastic look at some of the giants in this investment industry. And PIMCO? I believe it is the giant among giants.