https://www.financial-planning.com/list/bond-funds-with-the-best-15-year-returnsBond funds with the best 15-year returns
By Andrew Shilling
Managers behind fixed-income funds with the biggest long-term gains nearly double their peers. After a year marked by a global pandemic and near-zero rate environment, their shorter term returns were subsequently even more impressive.
The 20 top-performing bond funds of the past 15 years, with at least $100 million in assets under management, had an average gain of more than 7%, Morningstar Direct data show. Over the past 12 months, the same funds notched an average return of almost 18%.
When considering the bond-market landscape over the shorter timer, it may be hard to fathom the same success in the years to come, says Tom Bradley, managing director and head of capital markets at Miami-based fixed-income software vendor YieldX.
“Last year was an aggressive year for fixed-income performance with global central banks slashing rates as a result of COVID-19, and at the same time re-engaging in secondary market bond purchasing — the perfect combination for high-yield performance,” Bradley says. “Now that markets have plateaued and interest rates globally look grounded (possibly trending higher in the U.S.), fixed income will become a more nuanced sector to invest in as opposed to the ‘rising tide lifts all ships’ mantra of the last few years.”
Compared with broader markets, the iShares Core U.S. Aggregate Bond ETF (AGG), which has a 0.04% net expense ratio, recorded a 15-year gain of just 4.23%, data show. Over the past year, the fund had a gain of 0.32%.
In stocks, the SPDR S&P 500 ETF Trust (SPY) and the SPDR Dow Jones Industrial Average ETF (DIA) have had 15-year returns of 10.20% and 10.28%, respectively. In the past 12 months, SPY and DIA had gains of 50.29% and 45.30%. The funds have net expense ratios of 0.09% and 0.16%.
Morgan Stanley captures surge in retail investing thanks to timely E-Trade purchase
Despite record growth in wealth management, an otherwise rosy earnings report was marred by $911 million loss related to Archegos Capital.
Comments
YTD Return: 1.42%; 3-Yr. Annualized Return: 8.02%; 5-Yr. Annualized Return: 8.26%; 10-Yr. Annualized Return: 6.57%; YTD Net Flow: (millions): $120.52; 1-Yr. Net Flow (millions): $847.83; 3-Yr. Net Flow (millions): $1,118.06; 5-Yr. Net Flow (millions): $1,339.79; 10-Yr. Net Flow (millions): $1,528.24; 15-Yr. Net Flow (millions): $1,567.78; Minimum Initial Investment: $2,500; Inception Date: Jan. 31, 2005; Manager Names: Bill Zox and John McClain
ACGTX
YTD Return: -2.14%; 3-Yr. Annualized Return: 5.09%; 5-Yr. Annualized Return: 4.55%; 10-Yr. Annualized Return: 5.22%; YTD Net Flow: (millions): $25.33; 1-Yr. Net Flow (millions): $144.06; 3-Yr. Net Flow (millions): $1,553.26; 5-Yr. Net Flow (millions): N/A; 10-Yr. Net Flow (millions): N/A; 15-Yr. Net Flow (millions): N/A; Inception Date: Aug. 28, 1987; Manager Names: Scott A. DiMaggio, Matthew S. Sheridan and Gershon M. Distenfeld
SIHAX
YTD Return: 1.02%; 3-Yr. Annualized Return: 5.07%; 5-Yr. Annualized Return: 6.96%; 10-Yr. Annualized Return: 5.47%; YTD Net Flow: (millions): ($1.02); 1-Yr. Net Flow (millions): ($6.23); 3-Yr. Net Flow (millions): ($49.61); 5-Yr. Net Flow (millions): ($36.75); 10-Yr. Net Flow (millions): ($118.99); 15-Yr. Net Flow (millions): ($86.04); Minimum Initial Investment: $2,500; Front Load: 4%; Redemption Load: 2%; Inception Date: Aug. 5, 1996; Manager Names: B. Scott Minerd, Kevin H. Gundersen, Thomas J. Hauser and Richard J de Wet
JAHYX
YTD Return: 2.13%; 3-Yr. Annualized Return: 6.59%; 5-Yr. Annualized Return: 7.02%; 10-Yr. Annualized Return: 5.71%; YTD Net Flow: (millions): $1.46; 1-Yr. Net Flow (millions): ($48.04); 3-Yr. Net Flow (millions): ($325.69); 5-Yr. Net Flow (millions): ($1,004.49); 10-Yr. Net Flow (millions): ($1,042.00); 15-Yr. Net Flow (millions): ($619.14); Minimum Initial Investment: $2,500; Inception Date: Dec. 29, 1995; Manager Names: Brent D. Olson and Seth Meyer
IPHYX
YTD Return: 1.16%; 3-Yr. Annualized Return: 6.27%; 5-Yr. Annualized Return: 6.97%; 10-Yr. Annualized Return: 5.69%; YTD Net Flow: (millions): ($9); 1-Yr. Net Flow (millions): ($34.81); 3-Yr. Net Flow (millions): ($170.38); 5-Yr. Net Flow (millions): ($314.25); 10-Yr. Net Flow (millions): ($599.77); 15-Yr. Net Flow (millions): ($841.72); Inception Date: May 3, 2004; Manager Names: Randall Parrish and Rick Cumberledge
SHYAX
YTD Return: 4.26%; 3-Yr. Annualized Return: 6.68%; 5-Yr. Annualized Return: 8.34%; 10-Yr. Annualized Return: 6.17%; YTD Net Flow: (millions): ($40.33); 1-Yr. Net Flow (millions): ($93.23); 3-Yr. Net Flow (millions): ($301.19); 5-Yr. Net Flow (millions): ($727.33); 10-Yr. Net Flow (millions): ($1,236.19); 15-Yr. Net Flow (millions): ($1,040.26); Minimum Initial Investment: $100,000; Inception Date: Jan. 11, 1995; Manager Names: Donald E. Morgan, Robert L. Cook, Paul A. Karpers, Kevin P. Loome, Thomas G. Hauser, David S. Aniloff, Seth Brufsky, Michael E. Paasche, Thomas J. Gahan, Michael Schafer, Douglas C. Pardon, Kapil Singh and Chris Mathewson
FHIIX
YTD Return: 1.82%; 3-Yr. Annualized Return: 6.41%; 5-Yr. Annualized Return: 6.99%; 10-Yr. Annualized Return: 5.84%; YTD Net Flow: (millions): ($3.33); 1-Yr. Net Flow (millions): ($3.1); 3-Yr. Net Flow (millions): ($97.82); 5-Yr. Net Flow (millions): ($329.8); 10-Yr. Net Flow (millions): ($692.87); 15-Yr. Net Flow (millions): ($795.67); Minimum Initial Investment: $1,500; Front Load: 4.5%; Inception Date: Nov. 30, 1977; Manager Names: Mark E. Durbiano and Steven J. Wagner
FXIMX
YTD Return: -0.92%; 3-Yr. Annualized Return: 6.37%; 5-Yr. Annualized Return: 6.48%; 10-Yr. Annualized Return: 5.88%; YTD Net Flow: (millions): $32.91; 1-Yr. Net Flow (millions): $10.64; 3-Yr. Net Flow (millions): $51.84; 5-Yr. Net Flow (millions): ($312.18); 10-Yr. Net Flow (millions): ($2,953.82); 15-Yr. Net Flow (millions): ($1,255.78); Inception Date: March 17, 2000; Manager Names: Scott A. Mather and David L. Braun
GUHYX
YTD Return: 2.55%; 3-Yr. Annualized Return: 8.09%; 5-Yr. Annualized Return: 9.42%; 10-Yr. Annualized Return: 6.43%; YTD Net Flow: (millions): $3.35; 1-Yr. Net Flow (millions): $7.99; 3-Yr. Net Flow (millions): $15.07; 5-Yr. Net Flow (millions): $3.61; 10-Yr. Net Flow (millions): ($61); 15-Yr. Net Flow (millions): ($56.19); Minimum Initial Investment: $2,500; Front Load: 2.25%; Inception Date: Sept. 1, 1998; Manager Names: John Blaney and Andrew Liggio
BHYAX
YTD Return: 1.63%; 3-Yr. Annualized Return: 6.21%; 5-Yr. Annualized Return: 7.47%; 10-Yr. Annualized Return: 6.04%; YTD Net Flow: (millions): ($10.87); 1-Yr. Net Flow (millions): $74.39; 3-Yr. Net Flow (millions): ($169.34); 5-Yr. Net Flow (millions): ($2,126.14); 10-Yr. Net Flow (millions): ($1,628.13); 15-Yr. Net Flow (millions): ($722.64); Minimum Initial Investment: $1,000; Front Load: 4%; Inception Date: Nov. 19, 1998; Manager Names: James Keenan, David Delbos, Mitchell S. Garfin and Derek Schoenhofen
TGEIX
YTD Return: -3.77%; 3-Yr. Annualized Return: 3.58%; 5-Yr. Annualized Return: 6.02%; 10-Yr. Annualized Return: 4.61%; YTD Net Flow: (millions): $361.89; 1-Yr. Net Flow (millions): $357.35; 3-Yr. Net Flow (millions): $3,090.39; 5-Yr. Net Flow (millions): $3,718.48; 10-Yr. Net Flow (millions): $4,747.04; 15-Yr. Net Flow (millions): $5,726.82; Minimum Initial Investment: $2,000; Inception Date: May 29, 1998; Manager Names: Penelope D. Foley, David I. Robbins, Javier Segovia and Alex Stanojevic
WHOSX
YTD Return: -15.06%; 3-Yr. Annualized Return: 6.6%; 5-Yr. Annualized Return: 2.87%; 10-Yr. Annualized Return: 7.58%; YTD Net Flow: (millions): ($22.3); 1-Yr. Net Flow (millions): $101.77; 3-Yr. Net Flow (millions): $42.34; 5-Yr. Net Flow (millions): $11.75; 10-Yr. Net Flow (millions): $138.87; 15-Yr. Net Flow (millions): $71.61; Minimum Initial Investment: $2,000; Redemption Load: 2%; Inception Date: Dec. 8, 1986; Manager Names: Van Robert Hoisington, Van R. Hoisington and David M. Hoisington
STHTX
YTD Return: 1.65%; 3-Yr. Annualized Return: 6.09%; 5-Yr. Annualized Return: 7.67%; 10-Yr. Annualized Return: 5.57%; YTD Net Flow: (millions): ($6.9); 1-Yr. Net Flow (millions): ($7.82); 3-Yr. Net Flow (millions): ($155.8); 5-Yr. Net Flow (millions): ($453.74); 10-Yr. Net Flow (millions): ($334.26); 15-Yr. Net Flow (millions): ($21.7); Minimum Initial Investment: $100,000; Inception Date: Oct. 3, 2001; Manager Names: Michael Kirkpatrick and James FitzPatrick
VWETX
YTD Return: -8.08%; 3-Yr. Annualized Return: 7.98%; 5-Yr. Annualized Return: 6.15%; 10-Yr. Annualized Return: 7.69%; YTD Net Flow: (millions): $13.66; 1-Yr. Net Flow (millions): ($14.18); 3-Yr. Net Flow (millions): $67.22; 5-Yr. Net Flow (millions): $699.27; 10-Yr. Net Flow (millions): $2,449.55; 15-Yr. Net Flow (millions): $5,700.67; Minimum Initial Investment: $50,000; Inception Date: Feb. 12, 2001; Manager Names: Scott I. St. John, Daniel Shaykevich, Samuel C. Martinez, Arvind Narayanan
PHYZX
YTD Return: 2.35%; 3-Yr. Annualized Return: 7.44%; 5-Yr. Annualized Return: 8.16%; 10-Yr. Annualized Return: 6.63%; YTD Net Flow: (millions): $1,068.05; 1-Yr. Net Flow (millions): $5,135.74; 3-Yr. Net Flow (millions): $7,158.06; 5-Yr. Net Flow (millions): $8,239.13; 10-Yr. Net Flow (millions): $9,590.95; 15-Yr. Net Flow (millions): $9,855.75; Inception Date: March 1, 1996; Manager Names: Robert Cignarella, Brian Clapp, Robert Spano, Ryan Kelly and Daniel Thorogood
SGYAX
YTD Return: 4.17%; 3-Yr. Annualized Return: 7.26%; 5-Yr. Annualized Return: 8.73%; 10-Yr. Annualized Return: 6.87%; YTD Net Flow: (millions): $34.44; 1-Yr. Net Flow (millions): $132.83; 3-Yr. Net Flow (millions): ($521); 5-Yr. Net Flow (millions): ($504.26); 10-Yr. Net Flow (millions): ($308.2); 15-Yr. Net Flow (millions): $347.41; Minimum Initial Investment: $100,000; Inception Date: Dec. 5, 2005; Manager Names: Donald E. Morgan, Robert L. Cook, Paul A. Karpers, Kevin P. Loome, Thomas G. Hauser, David S. Aniloff, Seth Brufsky, Michael E. Paasche, Thomas J. Gahan, Michael Schafer, Douglas C. Pardon, Kapil Singh and Chris Matthewson
FAHCX
YTD Return: 5.5%; 3-Yr. Annualized Return: 9%; 5-Yr. Annualized Return: 9.85%; 10-Yr. Annualized Return: 7.33%; YTD Net Flow: (millions): $95.36; 1-Yr. Net Flow (millions): $56.61; 3-Yr. Net Flow (millions): ($256.53); 5-Yr. Net Flow (millions): ($288.65); 10-Yr. Net Flow (millions): ($215.73); 15-Yr. Net Flow (millions): ($328.34); Inception Date: July 3, 1995; Manager Names: Mark Notkin and Brian Chang
FAHIX
YTD Return: 5.33%; 3-Yr. Annualized Return: 9.47%; 5-Yr. Annualized Return: 9.85%; 10-Yr. Annualized Return: 7.19%; YTD Net Flow: (millions): $974.69; 1-Yr. Net Flow (millions): $900.3; 3-Yr. Net Flow (millions): ($619.88); 5-Yr. Net Flow (millions): ($645.25); 10-Yr. Net Flow (millions): ($3,152.87); 15-Yr. Net Flow (millions): ($2,878.46); Inception Date: Nov. 1, 1977; Manager Names: Mark Notkin and Brian Chang
BTTRX
YTD Return: -1.75%; 3-Yr. Annualized Return: 6.64%; 5-Yr. Annualized Return: 3.46%; 10-Yr. Annualized Return: 6.47%; YTD Net Flow: (millions): $5.38; 1-Yr. Net Flow (millions): $17.75; 3-Yr. Net Flow (millions): $6.03; 5-Yr. Net Flow (millions): ($54.53); 10-Yr. Net Flow (millions): ($65.52); 15-Yr. Net Flow (millions): ($273.8); Minimum Initial Investment: $2,500; Inception Date: Feb. 15, 1996; Manager Names: Robert V. Gahagan, Brian Howell, James E. Platz and Miguel Castillo
FXICX
YTD Return: -2.87%; 3-Yr. Annualized Return: 5.57%; 5-Yr. Annualized Return: 4.87%; 10-Yr. Annualized Return: 4.54%; YTD Net Flow: (millions): $22.32; 1-Yr. Net Flow (millions): $30.74; 3-Yr. Net Flow (millions): $70.54; 5-Yr. Net Flow (millions): ($217.03); 10-Yr. Net Flow (millions): ($2,729.09); 15-Yr. Net Flow (millions):
True. But it went much further ...
“The Fed originally said participants in the corporate bond-buying facility must have at least a BBB credit rating as of March 22. That's the lowest rung of investment grade. However, it later opened the program to ‘fallen angels,’ which are investment-grade companies that have recently been dropped into junk territory. ... Not all junk-rated companies can participate. Firms must be rated at least BB- at the date of the purchase.” Source
Yup - If you start using Treasury’s printing press to scour up & guarantee some marginally investment grade BBB bonds along with some good ol’ junk-rated BB- you’re going to light a fire under the corporate bond market. That’s the reason corporates did so well. The Fed’s rate cutting plus frightened equity investors running into bonds didn’t hurt either.
Picky, picky!
Fred
Do a M* screen for taxable bond funds, AUM >= $100 (million), and 15 year returns >= 7.17% and you get a similar top 20 list. The results aren't identical because the screen is being run a week later, but the results are similar. All 20 funds I find have 15 year performances well above 7%; the ones in the column in the aggregate merely average above 7%.
Most of the funds are indeed HY funds. That's to be expected. A diversified portfolio of HY bonds should have better raw performance than IG portfolios over the long term since risk is theoretically rewarded in the marketplace.
There's another class of funds that one would expect to have performed well anytime in the past 40 years as interest rates declined: long term and/or zero coupon funds. Not only is this not helpful, these funds are likely to be some of the worst performing funds going forward as interest rates rise.
In the article's list are two IG funds with extended durations:WHOSX (hard to get higher grade than Treasuries) and VWETX. Also in the list is American Century's last remaining target date zero coupon bond fund, BTTRX. For most of its life it had a very long duration, due in part to its target date and in part due to holding all zeros.
Other long term IG funds that my top 20 screen turned up include: DEEIX (at 8.55%/year, the best 15 year performance), VBLLX (an index fund despite the article saying all top performing funds were actively managed), and CLDAX.
There's even an EM fund, GMCDX / GMDFX , that outperformed some of the article's funds over the past 15 years.
When all is said and done, the article and my addendums are just mindless and relatively useless screens.
Show me the funds making money during rising rates.