FYI: The days of low volatility and central banks working in tandem as a backdrop for global markets may be a thing of the past—and that could be troublesome for investors that have loaded up on risk, which, these days, is most investors.
For the past decade, investors have become increasingly comfortable in riskier areas of the market—this is especially true of fixed-income investors, who have gone more aggressively into high-yield bonds and emerging-market debt in search of yield, as well as investors interested in international stocks. As the global backdrop becomes bumpier, however, those investors may be in for a shock.
So what to do? Some overlooked funds may have the answer. These funds pay more attention to risks in the market, which has held them back in a 10-year bull market that has charged past any fears, but will likely allow them to outperform if markets get messier. (And check out “The Best Stock Funds for Risky Markets.”)
Morningstar helped us identify funds that have held up better than peers during downturns. We looked at a 15-year period, in order to gauge their performance into and through the crisis, not just coming out. Taking just a decade-long view would likely turn up funds that did exceptionally well by taking on risk during a period of abnormally calm markets and accommodative central bank policies—especially in the bond market, says Morningstar analyst Sarah Bush. And that may not be the type of risk-taking investors want as rates rise and global growth slows.
Regards,
Ted
https://www.barrons.com/articles/the-best-bond-and-international-funds-for-risky-markets-51547248572?mod=djem_b_Weekly Feed for Barrons Magazine
