I did lots of benchmarking with actively managed funds that include bonds. What I found is every time there is a noticeable difference in performance, on the bond side, they have a significant amount of junk and B rated bonds.Over the last six months I have been looking at a non-Vanguard bond fund $Binc-BlackRock iShares Flexible Income Active ETF it does have a higher expense ratio of 0.40% but a good dividend yield 6.15%. Also it's led by Rick Rieder who from the research I have done is very capable. Right now I am in $VBTLX Vanguard Total Bond Index Fund (also is an ETF $BND) Expense ratio of 0.05% and dividend yield of 3.52% Trying to dig further into the pros and cons of them, I admit I get confused and maybe someone who could help me on that? Thanks for any help.
Check the makeup using Morningstar X-ray
https://lt.morningstar.com/demo/module. ... dings.aspx
When I do back testing, I find those funds also tend to drop further than the typical bond fund that holds A> in bonds and government treasuries and remain underwater longer.
That difference on the downside pretty much keeps me away from them.
I use bonds to blunt a downturn in my portfolio. If I wanted more performance, I would allocate more to the equities side rather than take more risk on the bond side with junk. Right now I’m exactly at 51% stock 49% bonds combining two low cost,well regarded, actively managed funds.
John
Statistics: Posted by itnetpro — Sun Jan 12, 2025 5:04 pm
