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Subject:  Ladder vs. Active Management Date:  5/21/2009  2:12 PM
Author:  m4gibson Number:  27576 of 36612

I have about 300K alloted for fixed income, inside an IRA. I start distributions next year, about 15K/year to start with.

I could build a conservative bond ladder or pay .5% to some guys to manage it.

The management guys say "we will make adjustments to duration when interest rates start to go up". So their approach is to become pro-active, buy sell, adjust as necessary to improve my Total Return over time.

Their Total return performance year by year for 10 years matches very close to Barclay Capital Inter. Gov't/Credit index. Except for 2008 they got 8.5% return as opposed to index which got 5.5%. All other years they were very very close. They don't make comissions on trades, just .5% fee each year.

Question is....Ladder myself or Active Management for .5%

Their goal would be to generate good returns relative to the benchmark in all interst rate invironments. Moderate total return.

I have no idea how a conservative bond ladder would have performed compared to the index for the last 10 years.
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