The January issue of our Bond Fund Intelligence, which was sent out to subscribers Tuesday, features the lead story, "Top Stories & Funds in '18; Outlook for '19; BFI Turns 4," which looks at the biggest stories and top-performing funds of 2018, and the profile, "FPA New Income's Atteberry: Staying Short But Flexible," our latest Portfolio Manager interview. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund yields and returns rose again in December. We excerpt from the new issue below. (Contact us if you'd like to see our Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings dataset, and mark your calendars our 3rd annual Bond Fund Symposium, which will take place March 25-26, 2019 in Philadelphia.)

The lead BFI story says, "A strong year for bond funds was interrupted by a period of outflows in the late stages of 2018 as bond investors sought the safety of lower-risk vehicles, including money-market funds. Bond fund assets and returns ended the year almost flat, with the former up slightly and the latter down slightly. We briefly review last year, including top stories from BFI, which celebrates its 4th birthday this month, and we list the top-performing funds in 2018."

It continues, "Bond fund assets remained above $4 trillion and bond ETFs broke above $600 billion in late 2018. According to ICI, bond fund assets stood at $4.087 trillion as of Nov. 30, 2018, up $51.0 billion, or 12.6%, from a year earlier. Bond ETFs totaled $614.1 billion on 11/30/18, up $66.4 billion, or 12.1%, over the past year."

Our "Fund Profile" says, "This month, BFI interviews Thomas Atteberry, co-manager of the $5.6 billion FPA New Income Fund and partner at the Los Angeles-based First Pacific Advisors. He discusses the fund's strategy, investor base and focus on preservation of capital. He also tells us why ultra-short may be too short in the coming year and why short-term is likely the 'sweet spot.'"

BFI asks Atteberry to, "Give us some background on the fund." He answers, "The FPA New Income Fund was originally run by Bob Rodriguez. FPA purchased the fund from Transamerica in 1984, so that's how we acquired a bond fund. Bob hired me in '97 to come to work for him as the first analyst on the fund.... I was made co-manager of the fund in 2004 and was put in charge in 2010."

We also ask him to, "Tell us about the fund. He responds, "We have two objectives we try to reach. One is a positive return in a 12-month period; and then we're trying to get CPI plus 100 basis points over a rolling five-year period. So, because of that, we're indifferent to a benchmark of any kind. We're merely looking for securities that help us accomplish those two objectives. So it's a very bottom-up, security specific, one idea at a time sort of approach. It has a fairly broad set of parameters to it. It's not very restrictive. In order to qualify, it just needs to be a bond. So we can look at any bond we want. It's a very broad mandate." (Watch for more excerpts from this article later this month, or see the latest issue of BFI.)

Our Bond Fund News includes the brief, "Yields Rise Again, Returns Jump in Dec. Bond fund yields and returns rose last month for almost all categories. The BFI Total Index returned 0.46% for 1-month and -0.08% over 12 months. The BFI 100 returned 0.65% in December and 0.03% over 1 year. The BFI Conservative Ultra-Short Index returned 0.19% over 1 month and 1.75% over 1-year; the BFI Ultra-Short Index averaged 0.12% in Dec. and 1.35% over 12 mos. BFI Short-Term returned 0.31% and 0.82%, and BFI Intm-Term Index returned 1.15% and –0.34% for 1-mo and 1-year. BFI's Long-Term Index returned 1.51% in Dec. and –1.37% for 1-year; BFI's High Yield Index returned -2.01% in Dec. and –2.00% over 1-year."

Another brief, entitled, "ICI Publishes Papers on Bond Fund Flows." It tells us, "Last month, ICI published, 'Debunking Assumptions About Bond Mutual Funds' Flows and Bond Sales,' which says, 'Recent outflows from bond mutual funds have drawn press attention and revived concerns among regulators about the impact of bond fund investors' actions on the broader bond market. Unfortunately, this attention is rooted in misconceptions -- as we'll show using ICI's comprehensive data covering 98 percent of mutual fund industry assets."

A third News brief, "WSJ Says '`Individual Investors Try Not to Panic Over Big Market Gyrations,'" explains, "Noninstitutional net inflows into U.S. ultrashort-duration bond funds rose to over $65 billion in the first 11 months of 2018, a record high for that period since 2000, according to data estimates from Morningstar Inc. At the same time, retail net inflows into money-market funds for that period were the highest in a year since 2008."

Finally, a sidebar entitled, "World BF Assets Flat," comments, "Bond fund assets worldwide slipped slightly but remained above the $10 trillion level in the latest quarter. Two of the three largest bond fund markets -- the U.S. and Ireland -- showed gains in the latest quarter (Q3'18) according to the Investment Company Institute's 'Worldwide Open-End Fund Assets and Flows, Third Quarter 2018.'"

It adds, "ICI's report shows worldwide bond fund assets declined $908 million, or 0.0%, to $10.253 trillion in the third quarter. Bond funds represent 20.5% of the $50.09 trillion in worldwide mutual fund assets. Globally, bond funds posted outflows of $294 billion in Q2 of 2018, after an inflow of $174B in Q1."

Email This Article




Use a comma or a semicolon to separate

captcha image

Money Market News Archive

2024
March
February
January
2023
December
November
October
September
August
July
June
May
April
March
February
January
2022
December
November
October
September
August
July
June
May
April
March
February
January
2021
December
November
October
September
August
July
June
May
April
March
February
January
2020
December
November
October
September
August
July
June
May
April
March
February
January
2019
December
November
October
September
August
July
June
May
April
March
February
January
2018
December
November
October
September
August
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013
December
November
October
September
August
July
June
May
April
March
February
January
2012
December
November
October
September
August
July
June
May
April
March
February
January
2011
December
November
October
September
August
July
June
May
April
March
February
January
2010
December
November
October
September
August
July
June
May
April
March
February
January
2009
December
November
October
September
August
July
June
May
April
March
February
January
2008
December
November
October
September
August
July
June
May
April
March
February
January
2007
December
November
October
September
August
July
June
May
April
March
February
January
2006
December
November
October
September