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T Rowe Price U.S. Bond Enhanced Index Fund Changing Name, Reducing Fees

hank
edited August 2020 in Fund Discussions
“Effective October 1, 2020, the T. Rowe Price U.S. Bond Enhanced Index Fund (PBDIX) will change its name to the T. Rowe Price QM U.S. Bond Index Fund to better reflect how the fund is managed. Additionally, we will change the fund’s fee structure and lower fees, also effective October 1, 2020. We will also launch a new I Class, which will incept on October 5, 2020 and be publicly available on October 7, 2020.”

Price periodically changes a fund’s name to better reflect its style. Couple others come to mind that underwent name changes: TRRIX, TRIGX. Likely many more. Wondering whether any other of their index funds will receive fee reductions?

Above excerpt pulled from email to clients. Here’s a link to their actual public announcement - LINK

Comments

  • CrashCrash
    remarkable YTD performance.
  • catch22catch22
    edited August 2020
    @Crash
    The performance of PBDIX is fully inline with the bond sectors it holds.
    Is is not outperforming it's index or category benchmarks.
    What you are witnessing with this fund is the blended performance of AAA-BBB rated U.S. bonds for the YTD; nothing more, nothing less.
    You may have missed this data from a few days ago:

    The price performance benefit of low yields:
    YTD.......
    --- MINT = +1.15% (Pimco Enhanced short maturity, AAA-BBB quality)
    --- SHY = +3.04% (UST 1-3 yr bills)
    --- IEI = +7.35% (UST 3-7 yr notes/bonds)
    --- IEF = +12.2% (UST 7-10 yr bonds)
    --- TIP = +8.5% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
    --- LTPZ = + 24.1% (UST, long duration TIPs bonds
    --- TLT = +27.3% (20+ Yr UST Bond
    --- EDV = +36.4% (UST Vanguard extended duration bonds)
    --- ZROZ = +39.2% (UST., AAA, long duration zero coupon bonds)
    ***Other, for reference, not AAA rated:
    --- HYG = -.3% (high yield bonds, proxy ETF)
    --- LQD = +9.8% (corp. bonds, various quality)
  • hank
    edited August 2020
    I posted purely for informational purposes. Not intended to be a recommendation. I have a rather small investment in the fund and received the client email. I passed it along along for the benefit of T. Rowe Price clients who may frequent the board. The current ER is 0.30%. The new ER will be 0.25%. No doubt you can buy the index cheaper elsewhere.

    One notable feature is absence of any other fees (low balance, IRA maintenance, etc.) as long as one keeps at least $50,000 with T. Rowe Price or elects to receive electronic statements. (They do ask clients to maintain at least $1,000 in accounts and will close accounts that remain under $1,000 after a specified number of days.)

  • CrashCrash
    edited August 2020
    Yes, my short remark above was an initial reaction, without looking (or caring to look) any deeper than that single number. I'm not rushing into PBDIX or anything else. I've concentrated my portfolio about as much as I want to, while still keeping it diversified. I haven't married my funds, but the love-fest is still strong.
  • hank
    edited August 2020
    @Crash - You’re fine. I appreciate your bumping my post over to “Discussions+“. I didn’t think you were planning on rushing into this fund. T. Rowe Price will never win out on fees - assuming lowest possible fees is one’s sole intent. However, I don’t find the 0.25% ER (effective in October) outrageous either.

    What you have observed is some nice performance from BBB corporates (borderline junk / investment grade) this year. You don’t suppose the decision by the Federal Reserve to start buying corporates that were teetering on the verge of being downgraded to ”junk” status had anything to do with their nice performance?

    I’m not a bond guy. I consider them at this point a “necessary evil”. For investment grade bonds @Catch22 is very knowledgeable. Ask him if you want to learn more. And for information re junk bonds, call on resident expert @Junkster. :)

  • CrashCrash
    @hank. Thanks! I will... someday. Looks like stocks are taking off, but bonds are doing moderately well, too. ALL SORTS of bonds. The Fed is backstopping EVERYTHING. "Don't fight The Fed." I never intended to do so. But, the timing: Just after I moved mostly into bonds (for the purpose of reducing risk in retirement), here we go with a Fed-induced METH LAB, juiced Market. Oh, well. I'm still 35% in stocks and will continue to benefit, to that extent. Meanwhile, my bond funds are rolling along nicely, as well. "Let It Roll." Little Feat.
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