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That means they have higher correlation to rates, are simple indexes and mostly/all higher rated bonds. Managed funds allow managers to invest in other categories (HY, MBS) to get higher yield but also allow them to have better performance when rates go higher, lower the volatility IF they made the right decisions. Securitized is my favorite category LT where several funds have better performance + volatility + higher yield than a simple index.
BUT, in a real meltdown, as we had in the last several weeks, higher rated bonds and especially treasuries behave much better than other categories.
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BUT, in a real meltdown, as we had in the last several weeks, higher rated bonds and especially treasuries behave much better than other categories.