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A tale of two bond funds
closer
05-03-2008, 10:22 AM | Post #2514276
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Roberta, Lately I think Bill Gross has been more of a risk taker while Dan Fuss has been more conservative. For example, Gross recently had 31.45% of HABDX invested in mortgage-related bonds and only 10% in U.S. corporate bonds, while Fuss had 60% of LSBRX invested in U.S. corporates and 0 (zero) in mortgage-related bonds. HABDX is yielding only 5.05% but enjoyed good price appreciation, while LSBRX is yielding 6.75% and has had nearly flat price appreciation. Incidentally, in the recent Barron's Big Money Poll, 33.3% of the respondents were bullish on U.S. corporate bonds' prospects in the next 6-12 months while 45% were neutral. Gross, Fuss, and nearly everybody else thinks U.S. Treasuries are overvalued (62.2% of the money managers were bearish on them). I think HABDX or Pimco Total Return and LSBRX do make a well-balanced bond "sandwich." It will be interesting to see how Gross or Fuss may respond to S&P's upgrade of Brazil's bonds to investment grade last week. I note that Leuthold Asset Allocation (LAALX) has already staked out a position in Brazilian debt.
Topics
Bill Gross
corporate bonds
money managers
Pimco Total Return
S&P
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