Bond fund sponsors have been winners since 2008, but this year's sell-off in bonds is changing that say a pair of advisors uncovered by InvestmentNews
reporter Jeff Benjamin. Shareholders have pulled some $60 billion from bond funds and fund sponsors are starting to take action.
How bad could it get? Advisor Theodore Feight of Creative Financial Design thinks some bond funds won't make it:
If it's a bond fund company, they are trying to say that everything will be OK and that you should stay with your allocation to fixed income and the world will be fine, but I don't know how some of those companies are going to survive this. We have sold all of our bonds, and right now we're sitting on large-value, large-growth and small-cap stocks.
Feight's article notes that a few bond fund sponsors are taking action on preempting advisors. IndexIQ CEO Adam Patti suggests that it is only know that advisors and investors are ready for the message.
Vanguard [profile], Pimco's [profile] , Genworth Financial Wealth Management [profile] and Van Eck Global [profile] are all scrambling to get ahead of a real interest rate hike and inform their investors before more panic sets in closer to the end of the year.
Vanguard released a report showing the benefits of long-term diversification and Bill Gross has continued to stress that investors should stay with their fixed income assets in his latest analysis, Benjamin writes.
Genworth is doing a presentation on bonds for its quarterly meeting with financial advisers and Van Eck is sorting out new strategies:
"We're planning to put some material out to describe to investors where the right place to be is on the curve, and how to develop a strategy for fixed income," Jim Colby, a senior municipal bond strategist and portfolio manager at Van Eck Global told InvestmentNews.
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