PSLDX Review - PIMCO StocksPLUS® Long Duration Mutual Fund
Vložit
- čas přidán 7. 07. 2024
- PIMCO has been quietly beating the market and doing a version of the famous Hedgefundie Adventure for years with their mutual fund PSLDX. In this video, I review it and we'll check out its components, historical performance, replication options, and where to buy it.
M1 Pie for PSLDX replication: m1finance.8bxp97.net/AoBz71
// TIMESTAMPS:
00:00 - Intro
00:16 - What Is PSLDX?
03:15 - Risks of PSLDX
04:53 - Performance
06:08 - Replicating PSLDX
06:53 - Conclusion
07:22 - Where To Buy PSLDX
08:47 - Outro
// SUMMARY:
PSLDX is roughly 50/50 stocks/bonds levered up 2x for effective 100/100 exposure, and as is the PIMCO way, they’re active on the bonds side, with the stocks side linked to the S&P 500 via derivatives. PIMCO call it the StocksPLUS® Long Duration Fund.
So basically we’ve got a real-world proof of concept of the Hedgefundie strategy that’s been going on since 2007. Whereas the Hedgefundie strategy is 165/135 and NTSX is 90/60, PSLDX sits somewhere in the middle around 100/100. Also note that NTSX uses intermediate bonds, while HFEA and PSLDX use long bonds. HFEA and NTSX only use treasury bonds, but PSLDX’s managers are buying a cauldron of U.S. and foreign government and corporate debt securities. So while these 3 strategies are similar, they’re also different.
After the fee for PSDLX used to be above 1%, as of August 2021 it was adjusted down to 0.59%, compared to 0.99% for the Hedgefundie strategy and 0.20% for NTSX at the time of this video. Note that PSLDX would be terribly tax-inefficient and should only be held in tax-advantaged space. It pays sizable quarterly dividends and annual capital gains distributions. Its turnover is also nearly 200%! Seriously, don’t even try.
I think PSLDX is a good solution for someone who wants to implement a milder version of the Hedgefundie strategy while being completely hands-off. Truly set and forget. You would quite literally be letting the pros handle it. You’re just paying that relatively high fee for that convenience. But the fee is about the same as the leveraged funds it would require to get the same exposure. That fee has also decreased as of August, 2021, from 1.01% to 0.59%.
M1 Pie for PSLDX replication: m1finance.8bxp97.net/AoBz71
Read the blog post here: www.optimizedportfolio.com/ps...
#investing #stockmarket #mutualfunds #stocks
// INVEST
► M1 Finance: optimizedportfolio.com/go/m1
► My comprehensive review of M1 Finance: www.optimizedportfolio.com/m1...
► Get my dividend portfolio: www.optimizedportfolio.com/m1...
► Lazy Portfolios: www.optimizedportfolio.com/la...
► Beginners’ reference guide (updated regularly): www.optimizedportfolio.com/be...
► Webull (for stock traders; get 2 free stocks): act.webull.com/kol-us/share.h...
// SOCIAL
► Website: www.optimizedportfolio.com/
► Patreon: / optimizedportfolio
► Facebook: / optimizedportfolio
► Instagram: / optimizedportfolio
► Twitter: / optimizedport
► Support my channel by shopping on Amazon (free for you): amzn.to/2TLCgCc
I appreciate all the support!
Disclaimer: This is not financial advice, investing advice, or tax advice. The information presented is for informational, educational, and entertainment purposes only. Investment products discussed are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here: www.optimizedportfolio.com/te...
Disclosure: Some of the links above are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality content on this channel and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful.
Stocks and bonds both seem to be suffering right now, but both still have positive expected returns over the long term. What do you think of PSLDX from PIMCO?
Say the US keeps abusing its power as the reserve currency, and inflates debt and asset prices. While I'm not saying it's the most likely scenario, I think the risk is greater than ever before of losing reserve currency status. You could see a flight from the US stock market due to it's over valuation and desire to want to hold other sovereign debt. I would describe it as a unlikely tail risk, but the other comment that suggested holding this 100% I would not recommend to younger family members.
That said UPRO and EDV are both in my portfolio.
Succinct and professional video; thank you for your time.
Thanks!
Quick note - I'm pretty sure Hedgefundie is a girl/lady/woman.
Interesting. I don't remember seeing anything to indicate that.
Awesome detail, thanks very much. Is there a reason why you’d prefer 33% UPRO / 67% EDV over 50% SSO / 50% UBT? The fee is lower with the former presumably?
Thanks! Fees and liquidity.
Great video! Would the edv/upro M1 pie version be ok in taxable?
Thanks! "Ok" is relative and subjective. It would still require regular rebalancing, so not ideal for taxable space.
You mentioned in the video you bought your shares through ALLY as did I over a year ago now but things have turned south since that time. Are you aware of any early liquidation fees that Ally or perhaps Pimco may be charging if you get out of the fund?
Not sure. But also not sure why you'd want to sell and lock in losses after such a short amount of time.
If I am getting ready to retire, can I purchase a sizable chunk of this fund, since it is cheap right now (about $5.00 per share as of 09/09/2022) and it pays out distributions. I have owned a smaller amount of shares over a year now in a regular brokerage account. I have a variety of different investments in my overall portfolio. I was just looking to just utilize this as my main retirement fund to withdrawal out of. I am too young to withdrawal off my IRA Roth/TSP accounts. I just want that quarterly distribution. I want to retire early. I am 49 now. I was looking at the tax situation. It looks like it is still worth it to me. Especially, if the share price eventually ends up over $9 a share. Give me your gentle thoughts. Thanks
I personally wouldn't use PSLDX at/in retirement.
Would you recommend maxing out a Roth IRA in this fund every year you can?
You can get comparable returns without the purchase fees using 40/60 UPRO/EDV. Lower fees, no purchase fees in most brokerages. I don't see the advantages of PSLDX over using your own ETFs if you are willing to rebalance on your own.
UPRO/ TLT another option with similar but not identical performance.
If you started with a Roth, built up to $10k and then in $10k increments the purchase fee is not nearly as much of a chunk. Schwab charges $50.
What you do with your money will depend on your risk tolerance and time horizon.
Perfect storm of suck for this fund. Rates going up and S&P going down. Fallen almost 40% from its peak. Was the strong performance just because we’ve been in a falling rate environment for so long?
No, though falling rates definitely juiced bond returns for the past 40 years.
What would happen if it's not in tax free account? I like examples with numbers
I think tax drag was determined to be a whopping 3% or so.
Can you retire with 1mil at 50 investing in psldx?
Not sure.
What is your best guess for Total Return, going forward given interest rates increasing, thus hurting the bonds it holds?
No idea. I don't even try to make such guesses.
If you DID decide to hold PSLDX in a tax inefficient account, how bad would it eat into that historical CAGR?
Around 5%. Not even sure a broker would let you buy it in taxable. Also note that technically tax "efficiency" applies to the holdings, not the account type.
Live in a no state tax state is helpful but not perfect.
Indeed
Down 42% Great Call!
Genuinely confused. Is this supposed to be a dig?
1. I didn't "call" anything.
2. PSLDX is still beating the S&P 500 since its inception, even including 2022 YTD.
2. No one is buying this fund for 1 year.
3. It's well established - and the investor buying this fund should know - that this environment is the achilles hill for a fund like this.
PSLDX is worth the trouble.
Though somewhat different, it may be obsolete now with RSSB.
I want to collaborate with u on a video, but I dn't know how to tact u。