The good bond manager looks at the risks versus the incremental yields, and spreads his investments among a mix of good risks.
It is at that point that
a good bond manager tosses as much risk as he can overboard without bringing yield so low that his client screams.
A good bond manager has already decreased the portfolio duration (selling long term bonds to buy more short term bonds) to make sure that the bond fund doesn't drop drastically.
Personally, I don't think Gundlach makes his money that way for his funds, but in case he does, how should
a good bond manager view junk bonds?
Good bond managers get a sense of when momentum is overdone, and act against it, but follow when the momentum is gentle.
The best bond manager in the US is standing up front.»
I've written too much, but I will give you one more key lesson of the period 1990 - 2008 regarding ratings, and this applies to sovereign issues today: Ratings that must be maintained in order to avoid a given result are dangerous, and
good bond managers avoid investing in such bonds.
Not exact matches
A
better option, in Hallett's opinion, is an actively managed global
bond fund, in which the
manager can move in and out of countries as he or she sees fit.
So, when an economist or
bond fund
manager makes an accurate forecast about Treasury yields, his or her clients are probably doing very
well.
By choosing relationship banks carefully, and selecting a bank that provides a single point of contact -; a single relationship
manager that can be treated as a consultant as
well as a credit
manager — it creates a stronger
bond.
A particular group of
managers who constantly update their view on the
best macro opportunities are known as ETF strategists — they use index ETFs to create a global stock and
bond portfolio.
Efficient diversification will not be enough to earn
good returns; even very
well established track records will provide a less reliable guide to future performance; and
bond managers will probably have to stray far from their comfort zone to deliver even modestly positive real returns.
The company, which invests about evenly in stocks and
bonds, performed
well against the backdrop of a particularly difficult
bond year, portfolio
manager Chip Carlson said.
But the company we keep is
good, including Warren Buffett and most recently, Bill Gross of PIMCO (
manager of the country's largest
bond fund).
The overall allocation to
bonds was steady at 40.8 percent, with several
managers saying inflation - linked
bonds offered
good value, especially considering the recent rise in oil prices.
I think the issue here is whether any amateur fund
manager (which I think is what we all are — including those financial advisers who create their own «homegrown» portfolios using trackers and
bond funds) can seriously manage a portfolio for income or for growth and control against downside risk (in equities or
bonds) as
well as a
good active management group like Invesco perpetual or M&G.
Enlightened investors intuitively recognize how difficult it is to consistently and accurately predict the
best securities (stocks,
bonds, mutual funds etc.), which money
manager will outperform, or when to be in or out of the market or out — as is the traditional approach to managing portfolios.
The mutual fund
manager, as
well as a team of financial analysts, researches the area of investment and makes informed decisions about which stocks or
bonds to buy or sell in order for the mutual fund to achieve the highest rate of return.
As a
bond manager, I was pretty
good at price discovery.
Many investment
managers have lowered the average duration of their fixed - income investments
well below that of the overall
bond market.
Rather than put forth a costly effort to be known, it is cheaper to get the
bonds wrapped by a
well - known guarantor; not only does it increase perceived creditworthiness, it increases liquidity, because portfolio
managers can skip a step in thinking.
We are
well known as a specialty
manager of Canadian corporate
bond portfolios.
Give the man credit, and the erudite folks at Hoisington Investments who are quietly the
best bond investment
managers over the past 30 years.
«In our view this is probably a generational opportunity for high quality corporate
bonds and provincials and federal agency
bonds,» says Scott Lamont, head of fixed income at Phillips, Hager & North Investment Management Ltd., and
manager of the firm's
bond fund, a top - rated performer on the MoneySense
Best Mutual Funds Honor Roll.
Let me put it this way, if someone can pick the
best performing index of
bonds to compare against stocks, what is to keep the stock
manager from picking the
best sub-index of stocks to be the policy comparison?
@Jerry, I agree that today the main risk in
bonds is duration risk (AKA interest - rate risk)-- last weekend's Barron's has an interview with the UBS Wealth Management top
managers pointing out this means convincing investors to switch from Treasuries and investment - grade corporates to
well - selected junk (HYLD is a jewel there — DO N'T go for index funds in
bonds, very differently from ones in stocks they make no sense... where's the sense in wanting to lend more to companies which are more indebted?!
Skilled
managers may assemble a fund that performs
better than funds with similar objectives, and sometimes
better than the stock or
bond markets as a whole.
Active
bond managers focused on the short end of the yield curve did far
better than their counterparts focused on equities and other pockets of the
bond markets.
I did very
well as a corporate
bond manager for two short years, but in early 2003 my boss gave me an ultimatum, «Move up to the main office in Burlington, VT, or you are severed.»
That isn't to say you shouldn't expect your
bond managers to be working hard to make the
best of the opportunities out there but with this as a starting point there is a limit to what we can do.
The Index House recognizes how difficult it is to accurately and consistently predict the
best securities (stocks,
bonds, mutual funds, etc.), which money
manager will outperform, or when to be in or out of the market — as is the traditional approach to managing portfolios.
Got ta do more research; this would be a lot easier if I were back to being an institutional
bond manager, and had a
better sense of the
bond market pulse.
The
manager closely monitors the attractiveness of corporate
bonds in relation to government - issued
bonds, and will concentrate the fixed income portion of the portfolio wherever the
best relative value is found.
Enlightened investors intuitively recognize how difficult it is to consistently and accurately predict the
best securities (stocks,
bonds, mutual funds etc.), which money
manager will outperform, or when to be in or out of the market or out — as is the traditional approach to managing portfolios.
Ask about the
bond managers strategy as
well.
A FAVORITE BECAUSE: With
bond yields in general at historic lows, this fund's 0.23 % exp ratio gives it an advantage even
better managers at other funds won't be able to beat.
«There are still some
good people there — Dan Ivanscyn was named
bond fund
manager of the year — but I didn't go in his fund.
Two Factors: Volatility and Credit Spread To achieve
better security selection, we chose two factors that empirically have demonstrated a strong relationship between factor exposure and performance statistics and that have long been incorporated in investment analysis by corporate
bond portfolio
managers.
There was a division of labor — credit analysts would opine on the likelihood of whether a company was «money
good,» and portfolio
managers would try to decide relative value, analyze structure issues, and figure out whether the
bond fit client needs.
I have stories from that period... as a
bond manager, I am at my
best in crisis mode.)
As opposed to their Canadian equity portfolio management brethren, Canadian
bond managers should do reasonably
well after the FPL is removed.
Good corporate
bond managers have an intuitive feel for when yield relationships justify a trade.
Because
managers Dan Fuss and Kathleen Gaffney typically own a large helping of high - yield, or junk,
bonds (those rated double - B or lower), as
well as
bonds from developing nations, the fund took a hit when investors bailed out of anything smacking of risk during the financial crisis and rushed into Treasuries.
More on MoneyWatch: Active
Bond Managers Fare No
Better The Economy Isn't the Same as the Market Why the Concern over Negative TIPS Yields Is Overblown When Dollar - Cost Averaging Makes Sense When Dollar - Cost Averaging Doesn't Make Sense Hear Larry Swedroe discuss current investment trends and topics every Sunday at noon on 550 AM KTRS in St. Louis or streaming via the KTRS Web site.
If the guarantor is not
good, then the
bond manager has to get an analyst to look at the underlying creditor.
The
bond manager doesn't have to think about the credit if he knows the guarantor is
good.
I was the risk
manager as
well as a corporate
bond manager.
Though I was only a corporate
bond manager for two very special years, where I did
well against a tough market, the way I did business helped us to do
well, by being ethical above all else.
I'm happy to say that I stayed above the fray, because as a corporate
bond manager, technical analysis helped me manage market risk
better.
Credit analysts are a corporate
bond manager's
best friends.