PIMCO Funds Explained

No problem. I'll get back and edit this post in a few hours.

My initial thought was to do what was recommended for me. 30% lg, 30% mid, 20% small, 20% int'l or some variation. Her fund options don't appear to be as good as mine but I think I've found some decent ones.

quote:

---

30% lg, 30% mid, 20% small, 20% int'l or

---

I don't want to step on anyone's toes, but 50%small/mid seems a little high to me.

Benny will be the absolute best person to listen to with regards to the fund posted in the original post.

quote:

---

I trust your advice

---

Oh, you poor soul.

If you are wanting a basic aggressive model it would be something like this in my opinion:

Lg= 48%
Smid= 28%
Int'l= 17%
Alts=5-7%

Now, this can be tweaked in many different ways but it is a pretty good starting point. I have never seen a model that calls for 50% in smid. Maybe some others can chime in.

quote:

---

Can you explain when you have time?

---

If you are getting your info on a message board, that's a sure sign you need to leave your wife's retirement stuff ALONE.

quote:

---

If you are getting your info on a message board, that's a sure sign you need to leave your wife's retirement stuff ALONE.

---

Normally I'd agree, but MT contributors are pretty solid.

quote:

---

If you are wanting a basic aggressive model it would be something like this in my opinion:

Lg= 48%
Smid= 28%
Int'l= 17%
Alts=5-7%

Now, this can be tweaked in many different ways but it is a pretty good starting point. I have never seen a model that calls for 50% in smid. Maybe some others can chime in.

---

International comprises ~ 57% of the global equity markets. One could say many domestic companies generate revenue in international markets and believe one could gain international benefits from that and reduce direct exposure to international below 57%, but starting with 20-30% exposure to international is a reasonable allocation.

Some advocate more of a barbell approach, ie reducing overall equity allocation to reduce overall portfolio volatility by investing all equity in small value/international small & value and completely forgoing mid and large cap due to historical outperformance of small cap stocks. They would invest in 30-35% equity and the rest in fixed income and possibly some alts. Many ways to construct a portfolio although some require more patience and dealing with cycles of underperformance to capture long term expected return. As the saying goes, the only constants are death and taxes.

quote:

---

I disagree but thanks for your advice

---

He's not altogether wrong. Knowledge is $$$$$$$$$. Have to be knowledgeable to determine what is closer to truth than bullshite.

So first things first in recommending what you should do with this.

- How old are you and your wife?
- How much risk are you comfortable with?
- How far are you away from your "target" retirement amount?
- Do you follow markets daily/weekly?
- When you look at markets, what do you usually look at?
- How much money do you have in relation to your retirement funds (don't want amounts, just percentages)?

So the fund you're talking about is the PIMCO Total Return Fund, adminsitrative class. The administrative class is the type of shares you will have, because the minimum amount to invest in the institutional class is $1M. The only difference is the administrative class has higher fees. This is different from target date funds as target dates are just a mix of different asset classes (equities and bonds) that derisks as you get closer to retirement. For example, say you're 30 years old and planning on retiring in 30 years so you invest in the 2045 target date fund. Right now this fund will be ~80% equities and ~20% bonds. As you get closer to retirement this will shift more towards bonds as you want to protect your capital the closer you are to retirement.

Turnover of 380% is just the amount that is traded over the course of the year, I honestly wouldn't worry too much about that in this regard because I know how they calculate this figure and it can be skewed very easily with how the fund invests. But just for your educational purposes, 380% turnover would indicate that 380% of the average portfolio market value was traded througout the year.

What this is:
The PIMCO Total Return Fund, a core fixed income fund that focuses primarily on US fixed income with allocations to some non-US developed countries and emerging markets. It can utilize these positions through cash bonds or derivatives, depending on the market environment. It is an intermediate duration focused fund, which in simple terms means it will usually be between 3-6 years in duration. This is your interest rate risk, the longer duration you are the more interest rate risk you have.

What bonds are:
Bonds are any sort of fixed income instrument: treasuries, loans, debt, mortgages, lines of credit, other sovereign bonds, etc.. The Total Return Fund usually focuses on treasuries/TIPS, mortgages, corporate bonds, some municipals, and different allocations to emerging markets, non-US developed bonds, and currencies.

Why or why not this is a good/bad option:
It really depends on your risk tolerance. The Total Return Fund has been the bond staple since inception with over 8% annualized returns. That is not an indication of returns going forward as the past 30 years have seen a secular bull market in bonds, real estate, equities, and basically every asset class. If you have a sleeve of your retirement that core fixed income fits into, there isn't another fund I would recommend more. It really just depends on your abilitiy and willingess to take risk as well as your goals.

quote:

---

What happened to my hoped for ER reduction on PTTRX holdings? Gots to pay for my dogs ultra premium food.

---

You talking about a fee reduction? That's the funny thing about a fee reduction, everyone wants one during down years but good luck raising fees in good years.

In my experience, I've seen more fees gathered through performance fees over time rather than base management fees.