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Posted by WeathermanBill on June 10, 2008, 5:11 am
Interested in Dodge and Cox Income (DODIX) so started my research at
their site and found the following holdings:
https://www.dodgeandcox.com/pdf/shareholder_reports/dc_income_holdings_033108.pdf
Concerned about the GSE holdings (Freddie Mac, Fannie Mae) as I heard
that both have eased restrictions on home loans. So researched:
http://www.ofheo.gov/newsroom.aspx?ID=422&q1=0&q2=0
The regularatory agency.
Also read:
http://en.wikipedia.org/wiki/Mortgage-backed_security
Really hesitant about putting money into DODIX due to exposure to GSE
bonds. Are these bonds that the GSEs used to raise capital?? Are
these mortgage baked bonds??? What I am trying to determine is what
is the risk I am looking at if I buy this fund.
This is money my wife and I will need in 10-12 years.
Weathermanbill
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Posted by on June 10, 2008, 11:10 am
> Concerned about the GSE holdings (Freddie Mac, Fannie Mae) as I heard
These are NOT the subprime CDOs which are blowing up. These
are generally primary mortgage pass-throughs from conforming
loans (ie. 20%+ down payment, below certain caps, etc).
> Really hesitant about putting money into DODIX due to exposure to GSE
> bonds. Are these bonds that the GSEs used to raise capital?? Are
Some of them. Those are called "agencies" not "mortgages". And
both are investment-grade or better (ie. principal is safer
than the highest rated corporates). If you are looking at
fixed income, the only thing with more secure principal than
that are US Treasuries.
DODIX has 32% in US Corporates, 43% in mortgage pass-thru.
The mortgage pass-thrus are apparently mostly FNMAs.
DODIX is about as well-managed as a bond fund can be.
The last year it lost money was 1999, when it lost a
whopping 0.8%.
It's lagged its index this last year, probably due to
being light on treasuries - in the face of market
uncertainties, the flight-to-treasuries often makes their
gains, especially against other conservative fixed-income
securities, kind of crazy. But long-term, that fund
has performed very comparably to the lehman agg. I'm
not sure it adds much over just buying, say, Vanguard's
lehman-agg based index fund. Both have very comparable
long-term total returns, similar durations and average
effective maturities, etc. Somewhat different asset mix
(ie. the agg has some treasuries and very little cash),
but both have more mortgage pass-thrus than anything else.
Anyway, that may be more than you wanted to know. The
short story is that mortgage pass-thrus in these things
are *not* the leveraged subprime CDO crappola which has
been blowing up on folks.
--
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Posted by PeterL on June 10, 2008, 12:38 pm
> Interested in Dodge and Cox Income (DODIX) so started my research at
> their site and found the following
holdings:https://www.dodgeandcox.com/pdf/shareholder_reports/dc_income_holding...
>
> Concerned about the GSE holdings (Freddie Mac, Fannie Mae) as I heard
> that both have eased restrictions on home loans. So
researched:http://www.ofheo.gov/newsroom.aspx?ID=422&q1=0&q2=0
> The regularatory agency.
>
> Also read:http://en.wikipedia.org/wiki/Mortgage-backed_security
>
> Really hesitant about putting money into DODIX due to exposure to GSE
> bonds. Are these bonds that the GSEs used to raise capital?? Are
> these mortgage baked bonds??? What I am trying to determine is what
> is the risk I am looking at if I buy this fund.
>
> This is money my wife and I will need in 10-12 years.
>
> Weathermanbill
>
What percentage of the fund's holding is in these bonds?
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
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Posted by WeathermanBill on June 11, 2008, 5:11 am
>What percentage of the fund's holding is in these bonds?
>
This web site did not break into percentages
https://www.dodgeandcox.com/pdf/shareholder_reports/dc_income_holdings_033108.pdf
>From just glancing at the list I would guess 35-40%. Lists eight
pages of holding with no totals by category.
Thanks for the input everyone
Weathermanbill
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
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Posted by PeterL on June 11, 2008, 11:32 am
> >What percentage of the fund's holding is in these bonds?
>
> This web site did not break into
percentageshttps://www.dodgeandcox.com/pdf/shareholder_reports/dc_income_holding...
>
> >From just glancing at the list I would guess 35-40%. Lists eight
>
> pages of holding with no totals by category.
>
> Thanks for the input everyone
>
> Weathermanbill
>
Then you don't know how much exposure the fund has to these. Buying a
mutual fund spreads your exposure.
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
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