PIMCO Low Duration Fund (PTLAX)

This next fund, PIMCO Low Duration A, is part of best taxable bond funds. This fund is rated with 4 stars by Morningstar. It is categorized as short term bond fund. More details about the fund’s review can be found below.

PIMCO Low Duration A (Ticker: PTLAX)

PIMCO Low Duration A

The investment objective of PIMCO Low Duration Fund is to provide maximum total return. This PIMCO fund invests >65% of total assets in a diversified portfolio of Fixed Income Instruments of varying maturities. It invests mainly in investment-grade debt securities, but may invest <10% of total assets in high-yield securities rated B or higher by rating agencies. The fund may invest <30% of total assets in securities denominated in non US currencies, and may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers.

Fund Details

• Fund Inception Date: January 13, 1997
• Ticker Symbol: PTLAX
• CUSIP: 693390411
• Beta (3yr): 0.28
• Rank in category (YTD): 59%
• Category: Short-Term Bond
• Distribution: 1.93%
• Capital Gains: 0%
• Expense Ratio: 0.85%  
• Net Assets: $ 21.34 billion
• Number of Years Up: 12 years
• Number of Years Down: 1 year
• Average Duration: 3.83 years
• Average Maturity: 2.94 years
• Annual Turnover Rate: 461.0%

Updated on 11/8/2011

William H. Gross or known as Bill Gross has been the lead manager of this PIMCO Low Duration Fund since the Institutional Class introduced in May 1987. Later, this A Class fund (PTLAX) was introduced in January 1997. The annual expense ratio of this fund is 0.85%. This figure is comparable to the average in the Short-Term Bond category (0.88%). This fund has a dividend yield of 1.93%. The last dividend distributed in September 2011 is $0.01. The annual holdings turnover of this fund is quite high (461.0%) as of October 31, 2011, while the average turnover in the category is only 105.10%.

Morningstar gave this PTLAX fund a 4-star rating. The YTD return is 0.30%. Based on the load adjusted return, this best bond fund has returned 3.63% over the past decade and 4.26% over the past five years. The fund has recorded 12 years of positive return since its inception 13 years ago. The only year when this PIMCO Low Duration fund performed negatively was in 2008 with -1.68%. It has 3-year beta of 0.28. The average maturity is 3.83 years and the average duration is 2.94 years.

To start investing in this short term bond fund, investor will need a minimum of $1,000 for brokerage account. There is no IRA account available. This PTLAX fund is available for purchase from 111 brokerages. They are Schwab Retail, Vanguard, JP Morgan, Edward Jones, Merrill Lynch, Royal Alliance, Ameriprise Brokerage, Firstrade, Fidelity Retail Funds Network, Edward Jones, etc. The other classes of this fund are:

• Class B: PTLBX
• Class C: PTLCX
• Class D: PLDDX
• Class Institutional: PTLDX
• Class Admin: PLDAX
• Class P: PLDPX
• Class R: PLDRX

The annual expense ratio of the PTLDX fund is 0.46%.

The fund’s benchmarks are BofA Merrill Lynch 1-3 Year Treasury Index and Lipper Short Investment Grade Debt Fund Average. As of September 2011, the top 5 sectors of this fund are Money Market and Net Cash Equivalents (29%), Mortgage (22%), Investment Grade Credit (11%), Emerging Markets (10%) and Government-Treasury (9%).

Per the fund’s prospectus, the Principal Risks for investing in this fund include Interest Rate Risk, Credit Risk, High Yield Risk, Market Risk, Issuer Risk, Liquidity Risk, Derivatives Risk, Equity Risk, Mortgage-Related and Other Asset-Backed Risk, Foreign (non-U.S.) Investment Risk, Emerging Markets Risk, Currency Risk, leveraging Risk, Management Risk, and Short Sale Risk.

Disclosure: No Position

Other Bond Funds:

• Managers Short Duration Government Fund
• Vanguard Short-Term Bond Fund