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Fund Spy

It May Not Have Been the Month You Thought It Was

Treasuries weren't the only casualty in May 2013.

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At this point you've probably heard that May 2013 was a bad month for bonds. With the exception of the shortest-dated debt, Treasury bond yields rose across the maturity spectrum by similar amounts; the 10-year note gapped out roughly 50 basis points during the month. With a few exceptions, longer-maturity Treasuries naturally lost more than their shorter cousins. The losses incurred were some of the sharpest suffered over a single month in a long time. The Barclays U.S. Treasury Index tumbled 1.7%.

If you've been listening to the pundits, meanwhile, you also probably know that  PIMCO Total Return (PTTRX) suffered losses last month; it fell 2.15%. Interestingly, the fund's outsized pain didn't trace to its increased stake of conventional Treasuries from the month before, but mostly to a long-standing, long-maturity allocation to Treasury Inflation-Protected Securities (and a bit to the fund's 8% emerging-markets allocation). At the same time, the Barclays Aggregate U.S. Bond Index fell 1.8%, while the average intermediate-term bond fund bettered both with a 1.6% loss.

Eric Jacobson has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.