PFTAX - PIMCO Floating Income Admin

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PIMCO Floating Income Admin (PFTAX)
Expense Ratio: 0.80%
Expected Lifetime Fees: $24,322.95

The PIMCO Floating Income Admin fund (PFTAX) is a Nontraditional Bond fund started on 12/30/2005 and has $3.60 billion in assets under management. The current manager has been running PIMCO Floating Income Admin since 11/10/2005. The fund is rated by Morningstar. In addition to trading fees and broker commissions, this fund has 12b-1 fees of 0.25%

MarketRiders Prefers The Following ETF

iShares JPMorgan USD Emerging Markets Bond Fund (EMB)
Expense Ratio: 0.60%
Expected Lifetime Fees: $18,626.92

The iShares JPMorgan USD Emerging Markets Bond Fund (EMB) is an Exchange Traded Fund. It is a "basket" of securities that index the Nontraditional Bond investment strategy and is an alternative to a Nontraditional Bond mutual fund. Fees are very low compared to a comparable mutual fund like PIMCO Floating Income Admin because computers automatically manage the stocks.

The Following Nontraditional Bond Funds Have Lower Fees Than PIMCO Floating Income Admin (PFTAX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
BlackRock Strategic Income Opps Instl BSIIX 639.0% 2,900 0.71%
Goldman Sachs Strategic Income Fund Class IR Shares GZIRX 636.0% 1,900 0.77%
Goldman Sachs Strategic Income Fund Institutional Shares GSZIX 636.0% 1,900 0.68%
PIMCO Floating Income Instl PFIIX 43.0% 3,600 0.55%
PIMCO Unconstrained Tax Managed Bd Instl PUTIX 249.0% 258 0.70%
Putnam Absolute Return 100 A PARTX 186.0% 316 0.67%
Putnam Absolute Return 100 Fund Class Y PARYX 186.0% 316 0.42%
Putnam Absolute Return 300 Fund Class Y PYTRX 188.0% 1,100 0.62%

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Why Are These Metrics Important?

Turnover represents how much of a mutual fund's holdings are changed over the course of a year through buying and selling. Active mutual funds have an average turnover rate of about 85%, meaning that funds are turning over nearly all of their holdings every year. A high turnover means you could make lower returns because: 1) buying and selling stocks costs money through commissions and spreads and 2) the fund will distribute yearly capital gains which increases your taxes. Look for funds with turnover rates below 50%. For comparison, ETF turnover rates average around 10% or lower.

Generally, smaller funds do better than larger ones. The more assets in a mutual fund, the lower the chance that it will beat its index. Managers outperform an index by choosing stocks that are undervalued. In order to find these undervalued stocks, the manager has to know more than his competitors to develop an "edge." There are only a finite number of stocks a mutual fund manager can reasonably analyze and actively track to gain such a competitive edge. When the fund has more assets, the manager must analyze large companies because he needs to take larger positions. Large companies are more efficiently priced in the market and it becomes increasingly difficult to get an edge.