Diversified Income Portfolios

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Jan 12, 2010 1:26 pm

What combination of bond funds are you guys/gals are using these days for income?  I have a few clients that are looking to start taking monthly income and I'm trying to put together a portfolio that is somewhat conservative with a decent yield.  Also what funds are you guys using as an inflation hedge?  Floating rate?  Looking at taxable bond funds...thanks!















Jan 12, 2010 10:55 pm

Using Pioneer Strategic Income, Hartford Floating Rate, Wells Fargo Ultra Short, Lord Abbett Short Duration. And TIP

Jan 13, 2010 9:07 am
iceco1d:

Oppy International Bond, Principal High Yield, PIMCO Total Return, Vanguard GNMA, Goldman Short Duration Govie, Vanguard Short-Term Bond Index, Vanguard intermediate-Term Bond Index, Vanguard Prime Money Market.

If they are "no equities" type of clients, you might also want to look into some fixed annuities and/or indexed annuities (not for all, just for a part, in addition to some of the funds you're looking at). 

 
Thanks Ice and SFB,
 
Yup, using a VA with a GLWB at 6% for about half the cash for this client.  The other portion ($500K) needs to be a little more liquid.
Jan 13, 2010 9:22 am
iceco1d:

Oppy International Bond, Principal High Yield, PIMCO Total Return, Vanguard GNMA, Goldman Short Duration Govie, Vanguard Short-Term Bond Index, Vanguard intermediate-Term Bond Index, Vanguard Prime Money Market.

If they are "no equities" type of clients, you might also want to look into some fixed annuities and/or indexed annuities (not for all, just for a part, in addition to some of the funds you're looking at). 

 
Good choices.  I prefer Templeton World Bond to Oppy.  I think as ICE suggests here, you have to use index-type (low cost) funds for most fixed income other than Int'l, High Yield, and Total Return.  Otherwise, you're generally paying someone an extra 50 bps just to meet (or miss) the bond index.
Jan 13, 2010 9:52 am
B24:
iceco1d:

Oppy International Bond, Principal High Yield, PIMCO Total Return, Vanguard GNMA, Goldman Short Duration Govie, Vanguard Short-Term Bond Index, Vanguard intermediate-Term Bond Index, Vanguard Prime Money Market.

If they are "no equities" type of clients, you might also want to look into some fixed annuities and/or indexed annuities (not for all, just for a part, in addition to some of the funds you're looking at). 

 
Good choices.  I prefer Templeton World Bond to Oppy.  I think as ICE suggests here, you have to use index-type (low cost) funds for most fixed income other than Int'l, High Yield, and Total Return.  Otherwise, you're generally paying someone an extra 50 bps just to meet (or miss) the bond index.
 
B24,
 
Agreed, but this isn't a fee based account, so I will need to use retail funds to get paid.
Jan 13, 2010 10:33 am

I use Dryden Short Term bond, Thornburg Limited Term US Government fund, Delaware Diversified Income, Pimco Total Return, and Templeton World Bond. 

Jan 13, 2010 11:35 am
Omar:
B24:
iceco1d:

Oppy International Bond, Principal High Yield, PIMCO Total Return, Vanguard GNMA, Goldman Short Duration Govie, Vanguard Short-Term Bond Index, Vanguard intermediate-Term Bond Index, Vanguard Prime Money Market.

If they are "no equities" type of clients, you might also want to look into some fixed annuities and/or indexed annuities (not for all, just for a part, in addition to some of the funds you're looking at). 

 
Good choices.  I prefer Templeton World Bond to Oppy.  I think as ICE suggests here, you have to use index-type (low cost) funds for most fixed income other than Int'l, High Yield, and Total Return.  Otherwise, you're generally paying someone an extra 50 bps just to meet (or miss) the bond index.
 
B24,
 
Agreed, but this isn't a fee based account, so I will need to use retail funds to get paid.
 
Can you use C shares?  

 
For load-based funds, I would stick with the big bond managers for most of it: Franklin/Templeton, PIMCO, Lord Abbett, JP Morgan, Loomis Sayles (Fuss), a few others.
 
Jan 13, 2010 2:20 pm
iceco1d:
B24:
iceco1d:

Oppy International Bond, Principal High Yield, PIMCO Total Return, Vanguard GNMA, Goldman Short Duration Govie, Vanguard Short-Term Bond Index, Vanguard intermediate-Term Bond Index, Vanguard Prime Money Market.

If they are "no equities" type of clients, you might also want to look into some fixed annuities and/or indexed annuities (not for all, just for a part, in addition to some of the funds you're looking at). 

 
Good choices.  I prefer Templeton World Bond to Oppy.  I think as ICE suggests here, you have to use index-type (low cost) funds for most fixed income other than Int'l, High Yield, and Total Return.  Otherwise, you're generally paying someone an extra 50 bps just to meet (or miss) the bond index.






 
Thanks B24, never looked at Templeton World bond.  Will check it out this week.  Any particular reason(s) you like it (if you get a chance)?
 
First off, I like FT as a shop(s).  They have a great domestic Fixed Income dept at Franklin, great deep value equity managers at Mutual Series, and among the best international managers at Templeton.  Their international presence is unlike most in the US fund industry.  In addition to having overseas analysts and offices, they actually manage overseas funds (for other countries).
 
Versus Oppy: more conservative (primarily govt bonds, less emerging market), better returns, less drawdown, better upside, higher yield.  And I have never been overly impressed with Oppy as a firm.
 
Having said that, Oppy is probably a close second for the Int'l Bond fund.
 
Others will likely have differing opinions.
Jan 13, 2010 2:26 pm
mlgone:

why not 10% allocation to NEZYX Loomis Sayles Strategic Income.  I realize it is High Yield, but great manager

 
Fuss is the best.  But Strat Income (IMHO) is very highly correlated with equities, so it should really only be considered for the yield and the total return over LONG term.  He will be down when equities are down and vice versa.  He is awesome though.  But like First Eagle a few years ago, you have to worry about what will happen when he's gone (he's like 102 years old).
Jan 13, 2010 2:58 pm
B24:
Omar:
B24:
iceco1d:

Oppy International Bond, Principal High Yield, PIMCO Total Return, Vanguard GNMA, Goldman Short Duration Govie, Vanguard Short-Term Bond Index, Vanguard intermediate-Term Bond Index, Vanguard Prime Money Market.

If they are "no equities" type of clients, you might also want to look into some fixed annuities and/or indexed annuities (not for all, just for a part, in addition to some of the funds you're looking at). 

 
Good choices.  I prefer Templeton World Bond to Oppy.  I think as ICE suggests here, you have to use index-type (low cost) funds for most fixed income other than Int'l, High Yield, and Total Return.  Otherwise, you're generally paying someone an extra 50 bps just to meet (or miss) the bond index.
 
B24,
 
Agreed, but this isn't a fee based account, so I will need to use retail funds to get paid.
 
Can you use C shares?  

 
For load-based funds, I would stick with the big bond managers for most of it: Franklin/Templeton, PIMCO, Lord Abbett, JP Morgan, Loomis Sayles (Fuss), a few others.
 
 
I usually use C, but the client will likely get A at NAV (Trade will be over $1 mil).   I forgot about templeton....great fund.
Jan 13, 2010 9:08 pm

Is anyone using JPMorgan's strategic income fund?  I know the track record is REALLY short but I haven't found another fund that does the same thing.  Are there other out there that has the same flexibility?

Jan 15, 2010 11:22 pm
Omar:

What combination of bond funds are you guys/gals are using these days for income? I have a few clients that are looking to start taking monthly income and I'm trying to put together a portfolio that is somewhat conservative with a decent yield. Also what funds are you guys using as an inflation hedge? Floating rate? Looking at taxable bond funds...thanks!





























I use franklin income ( fcisx ) Loomis strategic ( neczx ) as my 2 main funds.



I've used in smaller amounts a couple of others I can get you the symbols on tuesday( eaton vance and alliance )

Jan 16, 2010 1:22 am

You guys are in the short end. I mean after fees and taxes is there anything left for the client?

Jan 16, 2010 8:19 am

I have been buying short term bond funds for people in fee-based and then moving assets out after a qtr or 2. Keeps the money in house and clients realize you are working the system to their benefit. Hopefully more biz comes from this.