Oldest known version of this page was edited on 2005-07-11 23:41:15 by RichardBerg []
(originally posted here∞)

There is a lot of collected wisdom here about what makes a good equity fund: costs, size, style, diversity, correlation, etc.

What I haven't come across yet are general concepts for evaluating bond funds. Funds that specialize in certain areas (e.g. international, junk, municipal) are easy enough to <i>categorize</i>, but the only actual yardstick that comes readily to mind is cost -- important, no doubt, but it doesn't answer the question of whether a fund manager is adding or siphoning away value. Much less whether the idea of adding value makes sense, or is definitively impossible, or remains hotly contested, or somewhere in between. Needless to say funds like <a href="http://socialize.morningstar.com/NewSocialize/Asp/FullConv.asp?forumId=F100000015&convSeqNumber=42946&mrr=1121126220">LSBRX</a∞> are accepted here a lot more readily than equally "active" stock funds.

Truth be told, I'm mostly asking about the funds in my 401k as per the over-lengthy thread #42637.

Fidelity Intermediate Bond Fund (FTHRX) - 0.61%
PIMCO Total Return Inst CL (PTTRX) - 0.43%

The Pimco is cheaper and boasts a far better track record. Oh sure, we don't look at past returns, but it's hard to keep your eye away from those stars (5* in every time slice between 1 month and 10 years). And yet, digging into the prospectus, I see that they're currently 63.70% in CASH and have a turnover rate of 470%. Hardly Diehard-like...or do they know something I don't? Maybe the rules are different for fixed income?

The Fido looks very "boring" (in the ways we usually appreciate). Wonder what costs them so much by comparison? I could get a micro-cap fund for that...

At first glance I'd be inclined to just buy VBMFX and/or VIPSX without a second thought, except for the fact that the IRS gives us far more room in our 401ks than our Roths for some reason. Methinks the puny $4-5k/yr I'm allotted in the latter should go toward things like International, Small Value, and REIT as they become possible. Also, since I'm just starting out, I can't buy more than 1 or 2 funds in a VG Roth due to the $3k minimum and <$10k fees. So I'm forced to compromise, and maybe even learn something in the process. Darn :)

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