The September issue of our Bond Fund Intelligence, which will be sent to subscribers Tuesday a.m., features the articles, "Flood of ETF Share Classes Continues: Allspring, DFA," which reviews the latest flurry of ETF share class filings and launches; and "PIMCO Total Return's Mittal in Barron's; Safe Haven Death," which excerpts from a recent "profile" of PIMCO Total Return. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns rose in August and yields declined. We excerpt from the new issue below. (Contact us if you'd like to see our latest Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.)
BFI's lead article states, "The Daily Upside published the article, 'Dimensional, Allspring Latest Firms to Tack on ETF Share Classes,' which says, 'Since the Securities and Exchange Commission began giving fund companies the green light via exemptions late last year to add ETF share classes of their mutual funds (and vice versa), few have hit the accelerator. The first to do so, Dimensional Fund Advisors, is already shifting gears. The firm is preparing to move a batch of eight standalone exchange-traded funds to ETF share classes of corresponding mutual funds. And another company, Allspring, last week filed with the SEC to add ETF share classes to five existing funds, a first for it.'"
It continues, "They quote Dimensional's Marlena Lee, 'We have standalone ETFs, but there are some benefits associated with merging those into the mutual funds.... The biggest benefit to our investors is the economy of scale.'"
Our "PIMCO Total Return's Mittal" article states, "Barron's explains, 'How This Bond Pro Revived a Legendary Pimco Fund.' The article states, 'When Mohit Mittal assumed the lead role in running the Pimco Total Return Fund in 2022, one of the firm's signature portfolios had gone through some rough years. In 2022, an especially harsh year for bond funds as the Federal Reserve aggressively hiked short-term rates to tame runaway inflation, the fund's total return was minus 14.4%, placing it in the bottom quarter of its Morningstar peer group.'"
It continues, "It tells us, 'That was quite a comedown. After all, this was the same fund that Bill Gross, the bond investing guru, ran for many years until he left Pimco in 2014. Mittal, now 48 years old, says he tried to bring an approach that had worked in other parts of the firm's large fund stable -- that is, looking for 'structural inefficiencies' in the bond market, such as a selloff in agency mortgages.'"
Our first News brief, "Returns Rebound in August, Yields Fall," states, "Bond fund returns rose in August and yields declined. Our BFI Total Index rose 0.27% over 1-month and rose 3.36% over 12 months. (Money funds rose 3.67% over 1-year as measured by our Crane 100 Index.) The BFI 100 increased 0.36% in August and rose 2.83% over 12 mos. Our BFI Conservative Ultra-Short Index was up 0.33% over 1-month and 3.95% for 1-year; Ultra-Shorts rose 0.32% and 3.90%. Short-Term rose 0.30% and 2.93%, and Intm-Term increased 0.27% in August and rose 2.21% over 12 mos. BFI's Long-Term Index was up 0.39% and up 2.00%. High Yield gained 0.77% in August and rose 4.79% over 12 months."
A second News brief, "Reuters Writes 'US ETF Investors Favour Shorter,’ which says, ‘Short U.S. Treasury exchange-traded funds drew $12.2 billion in the 20 trading sessions through September 8, while intermediate-maturity bond ETFs attracted about $5.7 billion over the same period.’ See also, ‘Reuters -- U.S. Bond Funds Extend Inflow Streak.'"
Our third brief says, "The NY Times' 'How to Make Sense of Mayhem in the Bond Market,' tells us, 'The bond headlines just won't go away, and for good reason. Interest rates are rising all over the world. In the United States, yields on Treasury bonds are hovering around levels that haven't been reached in decades, setting off alarms.'"
A BFI sidebar, "Invesco on Short ETFs," states, "Invesco tells investors to, 'Put Cash to Work With Short Duration ETFs.' Jason Bloom, Head of Fixed Income and Alternatives Product Strategy, explains, 'Many investors have been sitting in cash. And sure, it can feel safe in uncertain times. And there's a lot going on these days. But holding too much cash may be the wrong kind of caution.'"
Finally, another sidebar, "Vanguard Fixed Income Long," states, "Vanguard's 'Active Fixed Income Perspectives Monthly Pulse: August 2026' says, 'Dynamics should keep the Fed cautious, with a bias toward tightening if inflation remains elevated. Inflation risks remain skewed to the upside, particularly if labor-market conditions prove more resilient than expected or energy prices remain elevated. Downside risks to growth include a pullback in AI-related investment or renewed escalation of geopolitical conflict.'"
