Fund flows tell us what’s on investors’ minds. I’m
guessing many of you are contemplating buying some
of the funds at the top of fund flow charts and selling
some at the bottom. So, I thought I’d take a look at
some of the actively managed funds that we rate near
the top and bottom and shed light on their flows
for the past
12
months ending in March
2015
. You’ll
notice that a big theme is investors seeking out
replacements for
PIMCO Total Return
PTTRX
in the
wake of Bill Gross’ dramatic departure in fall
2014
.
Biggest Inflows
Metropolitan West Total Return Bond MWTRX
$36 Billion
Why the big inflows?
PIMCO
without the drama.
MetWest was started by ex-
PIMCO
managers,
but there are some notable differences with
PIMCO
.
First, MetWest avoids derivatives and vows to
stay on that course. Thus, issue selection can still
contribute, but it means MetWest may have to
close to new investors at some point. Buy this fund
and you get a pretty bold core bond fund that
will make an array of bets on things like yield-curve
positioning, credit-spread direction, and sectors.
Many investors fleeing
PIMCO
have gone with this
fund as a bold option or with
Vanguard Total
Bond Market Index
VBTLX
as a passive option. So,
if bold is good for you, then by all means join
the crowd on this excellent fund.
Dodge & Cox Income DODIX
$16 Billion
Why?
This fund falls somewhere between MetWest
and Vanguard Total Bond Market Index on the risk/
reward spectrum and focuses on issue selection much
more than interest-rate bets and other tactics of the
bolder funds. The portfolio is mostly corporate bonds
and mortgages with some Treasuries thrown in.
Another draw has to be Dodge
&
Cox’s management
stability. The chances of
PIMCO
-esque personnel
turmoil are remote. Dodge
&
Cox has a sizable and
stable management team with no stars. I highly
recommend this fund and, in fact, own it.
Dodge & Cox International Stock DODFX
$11 Billion
Why?
This fund recently closed to new investors,
so I’ll be brief. The fund is knocking the cover off
the ball. It’s a great fund with a Morningstar Analyst
Rating of
Œ
, and I own it.
PIMCO Income PONDX
$9 Billion
Why?
Great returns under managers Dan Ivascyn and
Alfred Murata. Ivascyn was named group chief invest-
ment officer following Bill Gross’ departure. The
worry here would be that he gets overloaded, but so
far we’re not too concerned. We kept this fund rated
•
after Gross’ exit, so, yes, it’s worth buying,
but beware the risks. This is a multisector fund that
currently has big stakes in high-yield bonds, foreign
bonds, and nonagency mortgages. All of those are on
the high-risk side of the bond world. The skippers
have managed those risks with aplomb so far, but you
can be sure there will be some years in the red.
Assessing the Most
Loved and Hated Funds
Fund Reports
4
Merger
PIMCO Total Return
T. Rowe Price Div Sm Growth
Virtus Emerging Markets Opps
Morningstar Research
8
What Happens When Vanguard
Owns Everything?
The Contrarian
10
Managers Who Spit Out Their
Own Cooking
Red Flags
11
Global With a Heavy Emphasis
on the USA
Market Overview
12
Leaders & Laggards
13
Manager Changes and News
14
Portfolio Matters
16
Making Your Retirement
Portfolio Buckets Work
Tracking Morningstar
18
Analyst Ratings
Income Strategist
20
Free-Range Muni Funds
Changes to the 500
22
FundInvestor 500 Spotlight
23
Follow Russ on Twitter
@RussKinnel
RusselKinnel, Director of Fund
Research and Editor
FundInvestor
May 2015
Vol. 23 No. 9
Research and recommendatio s for the s riou fund investo
SM
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