Go-anywhere bond fund managers can pick and choose from a complete menu of income investments.
With the broad band market down 2% so far this year, it’s easy to see the appeal of a fund that can invest in the corners of the market that are working. That’s where so-called unconstrained bond funds and their cousins, multisector bond funds, can help.
As the name implies, unconstrained funds (classified as “nontraditional” funds by Morningstar) can invest in a variety of fixed-income assets, from investment-grade corporate debt to junk bonds issued by firms with below-average credit ratings to emerging-market IOUs. They can hold outsize slugs of the fund’s assets in the bond sectors they prefer, or they can sell short (a bet that prices will fall) the securities they see headed south. Some of the funds can even hold stocks. Multisector bond funds are nearly as flexible, but some have limits—albeit broad—on how much may be invested in a given sector.
But the increased freedom comes with some extra risk, especially when big wagers go wrong. In one striking example, Janus Henderson Global Unconstrained Bond, the fund run by erstwhile “bond king” Bill Gross, lost 3% in a single day in May, caught off balance by a bet that German bonds would fall in price relative to Italian bonds (the market moved the other way). There are other caveats. Many of the funds in the two categories don’t have long track records, and expense ratios can be pricey.
We think the funds below represent the best combination of flexibility and moderate risk. They come with reasonable expenses and have shown they can withstand periods of market volatility. All are geared to prosper as rates rise, and most important, they are run by managers capable of taking full advantage of their freer rein. Returns and other data are through June 15.
この記事は Kiplinger's Personal Finance の August 2018 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は Kiplinger's Personal Finance の August 2018 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
MAKING A DIFFERENCE IN THE LIVES OF DISABLED VETERANS
He suffered grave injuries in the line of duty. Now he helps other veterans who have disabilities.
DO YOU NEED UMBRELLA INSURANCE?
A policy can protect you from financially devastating events.
Navigating Finances as a Blended Family
Money matters can get complicated when two families unite. Planning is key.
BREAKING UP WITH YOUR BROKER
Be aware of these challenges when you move your money to a new home.
CHOOSE A MEDICARE PLAN THAT'S RIGHT FOR YOU
Consider your health care needs over the long term as you weigh costs and coverage.
Keep Faith in These Stocks
IN 1997, I coined the phrase “faith-based investing.” It has nothing to do with religion or with picking stocks at random.
OUR ESG PICKS ARE THRIVING
Despite an ongoing backlash, our favorite stocks and funds focused on environmental, social and corporate governance issues had a good year overall.
MONEY MANNERS FOR THE MODERN AGE
The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
ELECTION 2024: POLITICS AND YOUR PORTFOLIO
Who wins the White House matters—but only at the margins when it comes to your investments.
YOUR GUIDE TO OPEN ENROLLMENT
With health care costs on the rise, it’s critical to select a plan that fits your needs at the right price.