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PIMCO Total Return Instl Message Board

  • alwayslearning808 alwayslearning808 Jun 4, 2013 5:11 PM Flag

    If Intrest Rates Go Up...

    With respect to PTTRX, if Interest rates go up, and bonds go down, does this increase the yield?

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    • Cheryl dug up the policy from Relianz that states EVERY dividend is deducted from the NAV. The yeild is a return of principal just like all other mutual funds. It hasn't been noticable because rates have been going down. The yeild is only the dividend over the NAV. Return on investment is zero, because the yeild is subtracted from your principle.

      Interest rates in general can only rise from this recession policy politics.

      Go to cash and come back when the talking heads are tracking federal funds rate. This rate needs to be better than 3% before bond funds loose the downside risk.

      I expect this will take five to ten years.

      Good luck, save your principle.

      • 1 Reply to efudddoc
      • could take 5 to 10 months. There's no reason why bonds don't get destroyed. The Fed owns $trillions of dollars worth of bonds and who's going to be buying them. Until Bill Gross goes short or does something drastic you need toget out of this. From somebody who held onto PTTRX for 7 years and sold where have just 10% of it left. I should have sold 100%.

    • What's frustrating me the most about PTTRX is the fact that it's going down or staying the same day after day, whether the 10-year T-note yield goes up or down, that's not a well managed fund. Gross needs to step it up and stop the drop by hedging somehow. He's behind 94% of similar funds for May, that's not a good sign of a well managed bond fund.

    • When PTTRX was in the 10 dollar range it was paying up to .05 a share DIVI..I have this fund to produce income on a monthly basis and expect the share price to flux... MAY drop was a surprise!! but long term will even out over time and we may see an increase in divi as Gross makes adjustments. I can understand the panic losing 2% in a month and think most of the damage is done and priced in. I think this is a buying oppertunity for the long haul. Even Gross said the Bond bull is over and I would not expect anymore 10-15 percent years
      Jeff Gundlach believes the 10 year will drop back below 2% over the summer and when all is done find support at 2.4%.There was no way 10 year was staying @ 1.65%.. so now we are at reality.
      The biggest swing I have seen is a buck20 in 2000 and a buck in 2008 and we know what happened in those years.. I have owned since then and dollar cost averaged to the plus side.... good luck

      Sentiment: Buy

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