PHIYX - PIMCO High Yield Instl

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PIMCO High Yield Instl (PHIYX)
Expense Ratio: 0.55%
Expected Lifetime Fees: $17,164.20

The PIMCO High Yield Instl fund (PHIYX) is a High Yield Bond fund started on 12/15/1992 and has $16.80 billion in assets under management. The current manager has been running PIMCO High Yield Instl since 02/1/2010. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

SPDR Barclays Capital High Yield Bond (JNK)
Expense Ratio: 0.41%
Expected Lifetime Fees: $12,984.20

The SPDR Barclays Capital High Yield Bond (JNK) is an Exchange Traded Fund. It is a "basket" of securities that index the High Yield Bond investment strategy and is an alternative to a High Yield Bond mutual fund. Fees are very low compared to a comparable mutual fund like PIMCO High Yield Instl because computers automatically manage the stocks.

The Following High Yield Bond Funds Have Lower Fees Than PIMCO High Yield Instl (PHIYX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
American Funds American Hi Inc Tr F-2 AHIFX 51.0% 18,100 0.46%
American Funds American Hi Inc Tr R5 RITFX 51.0% 18,100 0.42%
American Funds American Hi Inc Tr R6 RITGX 51.0% 18,100 0.37%
Federated Instl High Yield Bond Instl FIHBX 23.0% 1,100 0.50%
RidgeWorth Seix High Yield I SAMHX 83.0% 2,100 0.51%
T. Rowe Price Instl High Yield TRHYX 77.6% 2,600 0.50%
TIAA-CREF High-Yield Inst TIHYX 62.0% 1,400 0.40%
Vanguard High-Yield Corporate Adm VWEAX 26.0% 17,000 0.13%
Vanguard High-Yield Corporate Inv VWEHX 26.0% 17,000 0.23%
Wells Fargo Advantage High Income I SHYYX 78.0% 765 0.51%

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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.