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Low Risk Bond Funds with High Credit

willmatt72
in Fund Discussions
Recently, I did an evaluation of my bond fund portfolio and discovered that my overall credit risk was a bit higher than I would like. As a result, I sold a fund with medium/low credit and want to buy something that has less risk on the credit end. Any suggestions? I own THOPX but that still seems like a medium credit fund. I'm trying to stay away from mortgages, too, since I own PIMIX and MWTRX. Do you think it's a bad time to buy a fund with a large stake in treasuries?

Comments

  • AndyJ
    edited July 2014
    willmatt72 said:

    Do you think it's a bad time to buy a fund with a large stake in treasuries?

    Depends on how much you have in equities, and the nature of those equities. If it's a larger and/or riskier stake, it's not a bad idea to have some T's on your side in a core or core-plus fund. If it's a smaller and/or more conservative stake, it may be better to stick with core-plus and multi-sector. In either case, having at least one active manager who can go into equity/credit risk-off mode when he/she thinks it's appropriate isn't a bad way to go.

    I haven't followed it lately, but you may have just that kind of active fund in MWTRX.

    Not knowing anything other than the few details you've provided about your portfolio and objectives, that's about all I'd be able to offer on the subject.

    Best of luck, AJ
  • willmatt72
    Overall, I have about 35% exposure to equities in my overall portfolio, consisting of such funds as BERIX, VWENX, FCNTX, UMBMX, YAFFX, ARTGX and FCPVX. My bond exposure is about 40% and the rest is cash for now. It's a conservative portfolio overall. I don't need to take a lot of risk in my position.
  • AndyJ
    edited July 2014
    Hi willmatt, so you've got more bonds in BERIX (mostly non-IG, I think? M* doesn't show the credit breakdown) and VWENX (30%+ in interest-rate sensitive, IG corporates and some 'government'). I'd factor those into the decision.

    The lineup doesn't look all that risky on the equity front, and remember PIMIX is somewhat interest rate-sensitive too, so another possibility might be to just add some $ to MWTRX and PIMIX if you want a little more, not a lot more, equity/credit risk protection.

    Just some thoughts/considerations here ... leaving the due diligence to your analysis of your specific situation.
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