Consumer Reports: Don't Bolt Pimco Total Return Just Because Everyone Else Is

More than $25 billion has exited Pimco Total Return mutual and exchange-traded funds since manager Bill Gross left the firm in September.

But that doesn't necessarily mean you should join the exodus, says Chris Horymski of Consumer Reports.

"We're tempted to cite your mother’s bromide about your friend Johnny jumping into the lake," he writes.

While Pimco Total Return has struggled a bit over the last year, it has a stellar long-term return: 6.58 percent annualized over the past 15 years. That puts it in the seventh percentile of intermediate-term bonds funds tracked by Morningstar.

And Gross wasn't managing the fund by himself during that period, Horymski notes.

"There are still opportunities for it to provide investors with decent risk-adjusted returns."

In deciding whether to dump Pimco Total Return, instead of looking at what others are doing, "consider the extra cost you must pay to Pimco to attempt to beat the index," he says.

The Pimco Total Return Active ETF has an expense ratio of 0.55 percent, compared to 0.08 percent for the Vanguard Total Bond Market ETF.

Meanwhile, Nobel laureate economist Robert Shiller sees signs of trouble ahead in the bond market.

In the new edition of his 2000 book "Irrational Exuberance," due out later this month, the Yale professor writes, "The U.S. bond market, showing such low yields, looks as it if may have gone through something of a bubble and may collapse further, eventually," according to CNBC.

Massive global central bank easing has helped depress yields. But, "the story is longer and deeper than that. It's not just central banks," Shiller told CNBC.

"It's something about our investment opportunities and our fears and our culture. So it's a very deep phenomenon."

It probably won't last, given that long-term bond yields already are close to zero in many countries, he said. The 10-year German government bond yields 0.34 percent, and 10-year Japanese government bonds yield 0.41 percent. The U.S. 10-year Treasury yields 2.02 percent.

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