Nevertheless, I do not think it should be a core bond holding for any investors portfolio.In fact it probably takes the place (if there is one) of a hedge fund than bond mutual fund in a portfolio allocation. I say that because the fund literally can go anywhere in the area of fixed income domestic or interenational, treasury agency or corporate and any maturity. And because of the way actively managed mutual funds report their holdings one never knows in real time what it holds.
An example of this could be seen in the WSJ yesterday: my comments in blue
Bond-Fund Investors Can Rest Easy, Mostly
to Greece and Its Ilk Is Minimal
Most bond funds will dodge the debt meltdown in Greece, but about a dozen U.S. funds have at least five 5% of their assets there and in other financially troubled European nations, such as Portugal, Ireland and Spain....In my view the above is quite disturbing regardless of returns. For one the fund holds 20% foreign bonds, secondly the fund doubled its international holding in such a short period of time.
Pimco Total Return Fund, often described as the world's largest bond fund with more than $200 billion in assets, recently increased its exposure to international bonds, to about 20% at Dec. 31, from about 9% a month earlier. Because the move was so recent, it wasn't clear precisely what kind of debt the fund bought. A spokesman says portfolio managers have been emphasizing the German government bonds, while issuing warnings about bonds of Greece, Spain and Portugal. So far this year, the fund has returned 1.8%
Despite this I have seen many publications and websites recommend Pimco Total Return as the main bond holding.
pimco itself describes its fund as follows on its website
Investment professionals recommend building a portfolio diversified with stocks and bonds to help achieve your long-term financial goals. Regardless of whether that diversification strategy leads you to invest in two mutual funds or twelve, PIMCO Total Return Fund can be the foundation of your portfolio's bond holdings. The Fund invests primarily in an intermediate-term portfolio of investment grade securities - a combination that offers investors an attractive risk/reward profile.