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For Charles on IOFIX

So I (finally!) see IOFIX available NTF to me at TIAA. I read up on the fund in this months Commentary. Then read up on literature. One thing didn't quite understand is why the "opportunity set" for this fund might be finite. And related to that, wanted to ask if it was "too late" to buy the fund. Is there some expectation fund might tank in future, or is the suggestion manager might liquidate the fund in future?

If you can please clarify.


  • Please use this (link) which is basically a search of IOFIX ar MFO and read lots of previous info.
  • There have been extensive discussions on the M* discussion boards talking about the unique risk of this fund. Here is one excerpt that summarizes the risk: "* IOFIX = almost entirely pre-crisis legacy subprime non-agencies, a chunk of it in small, infrequently traded lots that they've claimed they've had a unique pipeline to acquire, which they seem to be saying in the annual report is running dry ... (at least in the amounts they'd need to keep topping up holdings as AUM climbs?)."

    IOFIX focuses only Residential Mortgage Backed Securities, which are "pre-crisis legacy subprime non-agencies" which are running dry while IOFIX grows larger, and many other mortgage oriented funds are still trying to tap into. These are very risky mortgages from a fund that charges one of the higher ERs in the bond oef categories. If you want to be a trader and try to jump on the bandwagon of one narrowly focused fund, do so at your own risk, but do it with your eyes wide open!
  • If you want to learn more about IOFIX and generally about this category, you can read this excellent presentation.
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