Examining Recent Winners and Losers in the Non-Traditional Bond Fund Category
The recent investment climate has been a challenging one for non-traditional bond funds, strategies that generally trade rate risk for credit risk. Confounding the chorus calling for the end of the 35-year bond bull market, U.S. Treasurys have rallied, credit spreads have widened and emerging market debt has faced heavy selling pressure. Due to market […]
The recent investment climate has been a challenging one for non-traditional bond funds, strategies that generally trade rate risk for credit risk. Confounding the chorus calling for the end of the 35-year bond bull market, U.S. Treasurys have rallied, credit spreads have widened and emerging market debt has faced heavy selling pressure. Due to market activity that has defied the “rate rise consensus”, combined with the wide dispersion of returns and behavior exhibited by non-traditional bond funds, understanding the differences in factor exposures between those leading the category from those lagging the pack provides important insights for investors.
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