Is not volatility in bonds unprecedented? Thank you FED!
Also, Bill Gross @ Pimco isn't such a Rock Star as the WSJ called him:
PIMCO Total Return Fund (PTRAX):
Vanguard Total Bond Market Index Fund Investor Shares (VBMFX):
I am surprised by the success of Vanguard's fund above. They did a great job!
i
Buy the market. Index it. No "genius" manager.
3 yr trailing std. dev: 4.79 *
3 yr trailing std. dev: 4.06 * [*] according to Morningstar, as of 5/31/09.
So not only has VBMFX beaten PTRAX over the last 5 years, it did so with significantly less volatility.
Not to mention the fact that unless folks have that Pimco fund load-waived in a 401k, most will also have to pay a hefty load to get in. Ugh.
Not to pile on Bill Gross - I do have a lot of respect for him and generally enjoy reading his views. But this was one of the worst calls of all time:
Barron's mid-year 2007 roundtable - wherein Bill tells everyone to buy EFA and PFN. In particular, it's the PFN call that I find so amazing - it's a floating-rate bond fund and within a few weeks of that article, it lost something like 20%, and a year and a half later, it was down 75% from when he suggested it. Nasty. Nastier than most equity funds. (I don't remember him ever saying to get out of it, either, but I could be wrong on that - anyone?)
Be careful out there with bond funds! Know what you're buying.
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