I have the following three bond choices in my 401K: Pimco Total Return, Thornburg Limited Term Income and Franklin Strategic Income. I noticed that the Pimco fund tends to go up when the market goes down but I can't seem to get enough information to identify what bond sector it fits in. I know it's not a LTT fund but of the 3 choices would Pimco be the best option to supplement the LT bond portion?
I hold TLT in another IRA account but as I contribute to my 401K, the LTT will get out of whack unless I allocate something to bonds. My 401K does not offer a brokerage account.
Any feedback would be greatly appreciated.
Pimco Total Return as LT Bond holding
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passerby
Re: Pimco Total Return as LT Bond holding
My wife has this in her 401k portfolio. It is said to be an intermediate duration core bond holding. It has corporate bonds, treasuries, and agency obligations. Not much junk, but others may comment here that it is not as high a quality portfolio as the PP thinking encourages for bonds.
As I recall the portfolio has been adjusted in the last several months to focus more on mortgage obligations as the manager anticipated QE3.
You could check it in the free version of Morningstar to see their views.
For awhile Bill Gross (manager) has been reducing maturities and durations. He is an able portfolio manager and senses that the quality of treasuries is degrading because of various federal foolishnesses such as fiscal cliffs, intransigence, FED manipulations of rates, and the indifference of leaders. His mom owns the fund too and thankfully he manages with a keen eye on preservation of assets so "return of the asset" is a consideration along with "return on the asset".
We hold PERM and also use Total Return, no regrets. I am not familiar with your other two options.
As I recall the portfolio has been adjusted in the last several months to focus more on mortgage obligations as the manager anticipated QE3.
You could check it in the free version of Morningstar to see their views.
For awhile Bill Gross (manager) has been reducing maturities and durations. He is an able portfolio manager and senses that the quality of treasuries is degrading because of various federal foolishnesses such as fiscal cliffs, intransigence, FED manipulations of rates, and the indifference of leaders. His mom owns the fund too and thankfully he manages with a keen eye on preservation of assets so "return of the asset" is a consideration along with "return on the asset".
We hold PERM and also use Total Return, no regrets. I am not familiar with your other two options.
Re: Pimco Total Return as LT Bond holding
I would treat the PIMCO fund holding as 65% cash and 35% LT treasuries, assuming you must use it as part of your PP.
If you add some EDV somewhere else in the mix the PIMCO fund could potentially be a useful piece of the puzzle, though it's obviously less ideal than just using treasuries.
If you add some EDV somewhere else in the mix the PIMCO fund could potentially be a useful piece of the puzzle, though it's obviously less ideal than just using treasuries.
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Re: Pimco Total Return as LT Bond holding
Interesting approach. I remember seeing somewhere in that epic bogleheads thread that you use vanguard total bond for a portion of your "deep cash" holding. Do you still do that?MediumTex wrote: I would treat the PIMCO fund holding as 65% cash and 35% LT treasuries, assuming you must use it as part of your PP.
If you add some EDV somewhere else in the mix the PIMCO fund could potentially be a useful piece of the puzzle, though it's obviously less ideal than just using treasuries.
There might be other options in your 401K for the cash allocation, but punting is always an option. You can just implement a boglehead portfolio for all or part of your 401K, and then have fun watching the boglehead portfolio bounce up and down while the PP stays rock steady.
Unfortunately the options are limited with employer 401K plans, although others have suggested that it might be worth asking HR to provide a better fund selection or brokerage window. If you have any self-employment income, you might be able to take advantage of it to set up an "escape hatch": start a self-directed solo 401K, contribute your self-employment income to it, and decrease your company 401K contribution accordingly.
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Re: Pimco Total Return as LT Bond holding
MT: Thanks! That's a great suggestion with Pimco and that allows me to hold 3 of the 4 parts of PP in my 401K. I'm starting to build up my IAU holding in an IRA account but was intrigued in holding some gold coins. Will it be more expensive to hold physical gold then IAU? How about holding 30% in physical gold and 70% in IAU?
Sophie: My 401-K does not have any Vanguard options. It's through an insurance company and offerings include a guaranteed 3% fixed interest option along with a SSG&A Index 500 fund. That's where I have my stock and cash options and the 3rd will be with the Pimco fund.
Just started PP about 6 weeks ago after many years of searching for the "ideal" investment vehicle. My TLT has dropped about 3% but more than offset by the stock portion (which is what PP is supposed to do). Trying to get my gold allocation up to PP % by buying on dips but I supposed I need to bite the bullet and get it up to the right % so that the PP is working in the appropriate manner.
This forum is incredibly helpful and the VP discussions are very intriguing.
Thanks everyone!
Sophie: My 401-K does not have any Vanguard options. It's through an insurance company and offerings include a guaranteed 3% fixed interest option along with a SSG&A Index 500 fund. That's where I have my stock and cash options and the 3rd will be with the Pimco fund.
Just started PP about 6 weeks ago after many years of searching for the "ideal" investment vehicle. My TLT has dropped about 3% but more than offset by the stock portion (which is what PP is supposed to do). Trying to get my gold allocation up to PP % by buying on dips but I supposed I need to bite the bullet and get it up to the right % so that the PP is working in the appropriate manner.
This forum is incredibly helpful and the VP discussions are very intriguing.
Thanks everyone!