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Core plus is an investment management style that permits managers to augment a core base of holdings, within a specified-objective portfolio, with instruments that have greater risk and greater potential return. Funds that utilize this strategy are called core-plus funds
***generally, I suspect the most common bond additions move more into more perceived risk with lower rated bonds.......junk bonds, and/or foreign holdings.
So, if i built my own magic bond fund as a plus, perhaps the prospectus would show that 90% of the holdings have bonds rated in the AAA - A quality; but the kicker would the other 10% of the portfolio is the etf, QQQ.
At this point, I presume the SEC may require the name of equity/income or strategic or whatever income fund.
You may be thinking about the SEC rule that requires an investment company (fund) having "a name suggesting that the company focuses on a particular type of investment (e.g., an investment company that calls itself the ABC Stock Fund, the XYZ Bond Fund, or the QRS U.S. Government Fund) to invest at least 80% of its assets in the type of investment suggested by its name. " https://www.sec.gov/rules/final/ic-24828.htm
This only applies to funds that have suggestive names. So while Templeton Foreign Fund (TEMFX) must have at least 80% of its portfolio in foreign securities, Tweedy Browne Global Value (TBGVX) doesn't have to meet this requirement, even though it typically does (currently 83.3% foreign).
AFAIK, the SEC hasn't set any rules saying that "core" has any meaning. So funds with "core" or "core plus" in their names are relatively free to invest however they please, subject to what's in their prospectuses.
Ultimately it comes down to who is categorizing these funds. For example, M* considers Loomis Sayles Investment Grade Bond Fund, LSIIX, a core-plus fund. Lipper calls it a corporate BBB bond fund. (79% of its bonds are rated BBB or better, and another 9½% are unrated.)
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So, if i built my own magic bond fund as a plus, perhaps the prospectus would show that 90% of the holdings have bonds rated in the AAA - A quality; but the kicker would the other 10% of the portfolio is the etf, QQQ.
At this point, I presume the SEC may require the name of equity/income or strategic or whatever income fund.
my 2 cents.
https://www.sec.gov/rules/final/ic-24828.htm
This only applies to funds that have suggestive names. So while Templeton Foreign Fund (TEMFX) must have at least 80% of its portfolio in foreign securities, Tweedy Browne Global Value (TBGVX) doesn't have to meet this requirement, even though it typically does (currently 83.3% foreign).
AFAIK, the SEC hasn't set any rules saying that "core" has any meaning. So funds with "core" or "core plus" in their names are relatively free to invest however they please, subject to what's in their prospectuses.
Average years to maturity (short, intermediate, long) is another matter. There, the SEC has set boundaries:
https://www.sec.gov/rules/final/ic-24828.htm#average
Ultimately it comes down to who is categorizing these funds. For example, M* considers Loomis Sayles Investment Grade Bond Fund, LSIIX, a core-plus fund. Lipper calls it a corporate BBB bond fund. (79% of its bonds are rated BBB or better, and another 9½% are unrated.)