Why unconstrained bond fund skepticism is justified (think 2008, not 2013) and why RIAs should say: None of the above
Brent Burns counter-dissects the Sanders Wommack vivisection of an article written by experts from LPL and Google
FAA
I certainly don’t mean to be a nudge on this because I think what the writer is saying makes sense but…
Citing 2008 as the poster child for risks of unconstrained bonds funds is, in my view, not a real good example. The reality of it is that in 2008 everything correlated…in a bad way. It wasn’t just unconstrained bonds. Also- I would imagine that if there was any spread product in the dedicated strategy cited- those bonds didn’t do so well either.
To me the real discussion should be around the utilization of SMBA- separately managed bond accounts vs. mutual funds. So whether it is a dedicated approach, active, spread yada yada- a separately managed account makes more sense for reasons the writer mentioned. It is doable for some but not everyone.
Lastly- dedicated or immunized investment strategies are not new- been around for quite a while.
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Pete Giza and Damon Deru go for Holy Grail of portfolio rebalancing with software that shuffles stocks, bonds... and asset classes; Believe it?
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June 11, 2019 at 9:49 PM
Investment & Wealth Institute
Association
Top Executive: Sean Walters
Morningstar, Inc.
TAMP
Top Executive: Joe Mansueto
