No. of Recommendations: 2
On Bond Funds, Again

Unless you’re a complete novice … then bond mutual funds ….should be one of your final options to gain fixed income exposure.

It’s almost like the opposite as what might be done on the equity side where you might have a core group of ETFs with stock selection as a “satellite” strategy. For fixed income, a laddered bond portfolio could be the core and fixed income ETFs could be used as “satellite” positions.

That might not make sense on a first read especially with regard to the use of bond ETFs. However, I think that we will see a breakthrough in this space where more actively managed fixed income ETF mandates appear as investors continue to push the limits to extract more yield from their portfolios in what is a tough, low-yield world.

Exactly what I’ve been arguing: Bonds should be owned directly. Bond funds should be used when accessing the underlying is difficult or impractical.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.