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Question for the board: does it make sense to hold a global bond fund...?
Appealing to the wisdom and experience of the good folks here, looking for thoughts and pros/cons: 1. Does it make sense to hold global bonds (what is the rationale)?
2. Does it make sense to have your one bond fund holding be a global bond fund if you are getting domestic bond exposure via asset allocation funds (currently 50% of my and my wife's portfolios)?
Well, I'm doing it. Unless I'm behind the news, my understanding is that Europe is not pulling back, or pulling back as much as the USA, in terms of greasing the economy in the EU. So in terms of bonds, it's still rather liquid across the pond. My PRSNX is holding up rather well. It's not offering the kind of divs. you can get via the likes of PTIAX or IOFIX. But those two are loaded up with mostly just one "flavor" of bonds. PRSNX is mostly sovereigns and corporates, but with a smattering of other stuff, too. So, it is a genuine mix--- including a slug of US stuff: floating-rate, near-cash or "cash equivalents." I'm still getting over .03 cents per share per month, even in these rocky times. ...And, like you, I've got US bond exposure through my two balanced funds. I'm also still riding PREMX: (EM bonds.) It's not hurting me enough yet to want to pull the plug. I'm quite interested to see what the March monthly div. will be, after the market closes on Thursday. M* puts PRSNX is a "world bond" category. It seems to me that it's too generic a category to be meaningful. MAINX is in there, too--- and doing VERY well lately. But MAINX is restricted to Asia.
I think a global fund makes sense just because I think domestic bonds may be at the starting stage of a bear bond market right now. And given that, I do not plan to hold to much in bond specific mutual funds going forward. I'm holding onto MAINX and debating what to do with my holdings in IOFIX and PONDX. I'd rather put the ballast or safe money into CD's (cash) which has no place to go but up. I do have a couple balanced funds and I intend to use a TRP retirement fund as a core holding. They all have bonds of course.
Income from bonds? Most all my money is in a 401k and IRA, so this idea of income/dividends means nothing to me. Plan to retire this year.
But more to your question, yes I think a global bond fund does make sense since domestic alone has little upside IMHO.
Comments
Income from bonds? Most all my money is in a 401k and IRA, so this idea of income/dividends means nothing to me. Plan to retire this year.
But more to your question, yes I think a global bond fund does make sense since domestic alone has little upside IMHO.
Hold more cash instead