So, aside from Investment's daily rants on here about the fund manager, what are your general consensus on this fund? Personally, with the FED stating rates will stay low, that hurts the fund in the short term, but also with the current yield, it seems like an attractive, relatively less volatile, place right now. In the long, when rates DO go back up, seems like a win-win fund.
Is the current downturn just sellers cashing in finally from the ride this past year or two up or people just looking to get out of the market all together? To me, it seems this is an all weather fund that should be attracting buyers and holders. Thoughts?
It seems to me that funds of this type have a higher correlation with the stock market than do conventional bond funds. What ties them together is the perceived state of the economy going forward. If you think we are falling into recession, stay out of this fund and consider a high quality conventional bond fund.
The fund is a way to swap duration risk for credit risk. However, in our current int rate environment, it's credit risk is a major foible. As in '08, if the market reacts adversely, these loans get clobbered. Clearly NOT a fund for the faint of heart who don't like principle fluctuations.
I don't think the so-called "high yield" is adequate for the high level of credit risk.