ICMUX

Comments

• larryB

  February 13

  Look at the yield relative to bond funds with higher quality portfolios. Given the high yield of ICMUX ask yourself why is the yield so much higher. Leverage? Less than investment grade bonds? Longer duration? Are you looking for a long term hold or a quick speculative position? Have you an interest in what used to be called “junk?” Risk and reward are linked. High yield doesn’t generally go with”safety and low risk in mind.” There is a guy who posts here and is generally described as the most successful bond investor ever and he certainly knows more than I. Maybe he will answer.
• DrVenture

  February 13 edited February 13

  That is not me. But, I'll add my two cents. As @larryB said, bond returns are directly/positively correlated with risk.
  
  You should look at bond funds that suit your risk tolerance. BOND is a great starting point. Bonds rated BBB or above are considered investment grade. Intermediate duration is considered the sweet spot right now between risk and return.
  
  BOND is smack dab in the middle ground and managed by a top investment house: PIMCO. The current rate environment (falling FED rates) is beneficial to bond funds. As far as risk goes (IMO) risk is minimized in this environment. One can take more risk, but that should not necessarily be considered a long term position. Eventually rates will go up again. That is not good for bond funds.
  
  Also, you should familiarized yourself with the various types of bond (fixed income) risk, Google can help you there. It can get complicated.
• Observant1

  February 13 edited February 13

  "this is money i want to invest with safety and low risk in mind."
  
  You should probably look for a short or intermediate-term fund comprised mostly of investment-grade bonds.
  As of 12/31/2025, 91.1% of ICMUX assets were below investment-grade or non-rated.
  A safe, low-risk bond fund will usually generate lower returns than ICMUX.
• DrVenture

  February 13 edited February 13

  Totally agree. The reason that funds like ICMUX are current favorites, is that they are higher risk. And right now, this is a risk-on environment for bond funds. The smarter folks that hold them will sell them at the first sign of trouble, be it rate risk or default risk or other.
  
  Also, be wary of smaller bond funds, they can be illiquid (hard to sell). From what you are saying, BOND is at the high end of your risk spectrum, IMO.
• gman57

  February 13 edited February 13

  Morningstar risk ratings:
  BOND ==15 - Inception 2012
  ICMUX ==13 - Inception 2010
  
  Since 2010 they both had 3 down years.
  Only year both were down 2022
  The BOND portfolio looks much better but the ICMUX managers must be better.
  
  2013 BOND down 1.26% ICMUX up 4.05%
  2021 BOND down 0.77% ICMUX up 10%
  2022 BOND down 14.57% ICMUX down 3.14%
  
  2014 ICMUX down0.24% BOND up 6.62%
  2015 ICMUX down 1.26% BOND up 1.22%
  2022 ICMUX down 3.14% BOND down 14.57%
  
  xxx WRONG Total return since 2012 BOND ==22% ICMUX ==61.5%xxx WRONGxxx
  Oops, messed up a bit.
  
  Total return since 3/1/2012 (BOND inception) BOND ==55.28% ICMUX ==96.67%
  
  Actually they are pretty close but BOND got creamed in 2022.
  
• DrVenture

  February 13 edited February 13

  Well, that's interesting. @gman57
  
  I was speaking in more general terms, based on ICMUX credit quality. Not seeking to disparage it. I didn't go any further than what was posted above about its holdings. Thanks for that clarification. Not recommending BOND, either. Just using it as an example of what is usually considered the upper end of safe (credit quality-wise), and only IMO.
  
  Personally, right now I am flying a bit closer to the Sun with my FI portion. Some CEFs, PIMIX and EGRIX. I do believe that in FI this is a great opportunity for risk taking. But, I don't recommend that, either.
  
  I think that @ducrow needs to educate himself a bit in this regard, in order to make well-informed choices.
• DrVenture

  February 13 edited February 13

  I might add that @gman57 has illustrated adroitly, the complexity of bond funds.
  
  ICMUX is a shorter duration bond fund of mainly non-IG corporates (93%) and appears to have decent returns over an extended period. He raises a great point abound quality bond fund managers. Its outperformance during rough patches is admirable.
• WABAC

  5:06AM

  ducrow said:

  i dont know anything about bond funds. all my bonds are in my mutual funds which are dodbx mtrix lcorx vgwlx pmaix. im looking to invest in a low risk bond fund with good returns. I have read good reviews of icumx on this site. going forward with interest rates falling how will the fund perform.. i have also looked at avefx but its returns are less than icumx. i will appreciate all the opinions and suggestions I receive. this is money i want to invest with safety and low risk in mind.
  

  If I were you, I would wonder why ICMUX is lagging YTD, and in the red for the last week, and month. Its three month return doesn't look so hot either when compared to other bond funds with three-year standard deviations near its 2.55.
  
  ICMUX made its big returns over the last three years as rates fell from the peaks of 2022. Seems to me that scenario has run its course.
  
  It's interesting that you compare it to an allocation fund like AVEFX. Maybe you are more comfortable in those sorts of funds?
  
  If safety and low risk are the goal, then look for ultra-short funds with high credit quality. And I would look for ones that successfully navigated the Great Recession and the recent inflation episode. My idea of safety and low risk may be different than yours.
• gman57

  7:47AM edited 8:32AM

  I agree with you @drventure from a overall outlook of their holdings you would expect BOND to be a better fund through thick and thin. Their returns during a lousy time for bonds 2022 (-14% vs -3%) was an eye opener for me and the better performance over time was a deciding factor. The only reason I know a little more about ICMUX is I researched it before buying it. Yes, bond managers matter.
• yogibearbull

  9:14AM

  2022 was a very strange year - for stocks and bonds.
  
  BOND is core-plus and ICMUX is multisector. So, PIMIX would be a better comparison for ICMUX.
  
  FWIW, ICMUX also outperforms PIMIX over 5 years.
  https://schrts.co/XAJGdIFt
• DrVenture

  12:31PM

  Holding a lot of well-chosen high yield corporates has apparently served them well.
  
  Top ten holdings:
  
  REALREAL INC 13% 01-MAR-2029
  3.77%
  GLOBAL TEL*LINK CORP 06-AUG-2029 TERM LOAN
  2.78%
  BEACH ACQUISITION BIDCO LLC 10.75% 15-JUL-2033
  2.58%
  CONDUENT BUSINESS SERVICES LLC 01-NOV-2029
  2.56%
  TWILIO INC 15-MAR-2031
  2.55%
  FULL HOUSE RESORTS INC 8.25% 15-FEB-2028
  2.46%
  GREEN PLAINS INC 2.25% 15-MAR-2027
  2.35%
  TRULIEVE CANNABIS NTS
  2.35%
  SKILLZ INC 10.25% 15-DEC-2026
  2.32%
  UNITED NATURAL FOODS INC 6.75% 15-OCT-2028
  2.23%
  Total
  25.95%
• Observant1

  12:52PM edited 12:54PM

  How will ICMUX—and high-yield funds in general—perform during a typical recession?
  Will these funds provide adequate ballast for equities during periods of market turmoil?
• yogibearbull

  12:55PM

  No. HY don't provide ballast for equities or protection during recession. HY has strong correlation with equities. ST-HY has additional rollover-risks during recession.
  
  Only high-quality bonds and munis act as ballasts.