Anyone have a good <<<Bond>>> fund?

Old man likes the following bond Fund (PIMCO Total Return Fund PTTRX) he said it spit off a real nice return for a remarkably stable and relatively safe vehicle => (4.5% in last 3 months). Anyone else like these instruments and/or have any others to recommend?? Thanks in advance with any insight and/or recommendations.

Ron,

To me buying a bond fund with rates so low exposes you to a loss of principal whenever rates start to rise..and a loss of potential rate improvement in the fund.

The bonds that are held in a normal bond fund will go down in price when rates go up because the coupon rate is lower when rates are lower and when rates go up, those lower coupon rates are not attractive and will drop in value.

I would keep in cash for a while until rates start improving myself..

wall:

Thanks for feedback. I was thinking along the same line and am in cash now. Ally.com has a 1.29%  100% liquid cash fund with no binding period (could take 100% of you $$ in 1 day with no penalty). Better than Charles schwab that was only giving .5%.
Not great BUT better than making 0% on your $.

 

I have some of my wife's 401k in that fund (most is in cash right now).  Great historical returns, but as Wall said, with interest rates set to go up, any bond fund may become unattractive.