Treacherous Times for Bond Funds Ahead




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ORIGINAL POST

POSTED BY Ed (14 days ago)
They sound conservative in marketing materials, but they pack special risks & surprises in a downturn that can entail a catastrophic loss for investors.

Bond ETFs and open-end bond mutual funds sound conservative in marketing materials, but they pack special risks & surprises in a downturn that can entail a catastrophic loss for investors.

Exchange-traded bond funds and bond mutual funds are big business. They’re a lot easier for retail investors to buy and sell than the actual bonds, particularly bond ETFs, which trade on stock markets just like stocks — and can even be day-traded. But this liquidity for investors is precisely the potentially catastrophic problem.

And in this era of rising interest rates and deteriorating credit, bonds already have plenty of other problems.

https://wolfstreet.com/2018/11/29/potentially-treacherous-times-for-bond-funds-ahead/


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