The only way to protect against rising interest rates' effect on fixed income portfolios is with active management, said Gibson Smith, CEO of fixed income at Janus Capital Management [profile]
at Morningstar's Investment Conference.
Smith says only active managers can shorten durations in a portfolio to stop an interest rate hike, which would really shirt a bond portfolio, reported Fund Industry Intelligence
. Allocating to high-yield bonds or bank loans won't cut it because those investment vehicles wouldn't provide complete coverage if interest rates go up.
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