Understanding Managed Bond Funds

Considerations for the Physician-Investor

By Staff Reportersdhimc-book11

Proper diversification among types of bonds is an important investment objective. The maturity schedule and the number of issuers are often very important, along with the issuers’ creditworthiness.

Individual Constraints

The constraints on purchases of individual bond issues often put the physician-investor at a disadvantage. Minimum amounts of investments are imposed by the marketplace or the issuer. Many doctor-investors find it impractical to meet these requirements and also obtain proper diversification (the amount of portfolio funds committed to debt-based securities simply is not large enough to obtain diversification and at the same time meet the other limitations). Accordingly, many investors find mutual funds devoted to debt-based securities most effective in achieving diversification.

A Large Marketplace

The mutual fund marketplace has many types of bond funds, and diversification can be obtained quite easily. The investor with a relatively reduced amount to invest in debt-based securities should consider using mutual funds.

Assessment

For more terminology information, please refer to the Dictionary of Health Economics and Finance.

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Conclusion

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3 Responses

  1. The Todd Cowle Municipal Bond Credit Report synthesizes, analyzes and presents aggregate credit information and trends in the municipal bond market.

    The report includes municipal bond rating information from the three major rating agencies – Moody’s Investor Services, Standard and Poor’s and Fitch Ratings.

    Jeff

    Like

  2. Jeff,

    Agreed … Federal Reserve Chairman Ben Bernanke has been carefully signaling that the Fed stands ready to raise interest rates this year if the economy continues to mend.

    http://registeredrep.com/mutualfunds/the_coming_bear_market_for_bonds0317/

    For bond funds that could be bad news (As you know, when rates rise, bond prices tend to fall).

    Seymour

    Like

  3. Say it ain’t so – Bill

    Investors pulled $7.7 billion from Pimco Total Return fund in August.

    http://money.msn.com/business-news/article.aspx?feed=OBR&date=20130904&id=16865595

    Bill Gross’s Pimco Total Return Fund, the world’s largest bond fund, lost $41 billion of its assets in the past four months through withdrawals and price losses, according to data from Morningstar, Inc.

    Sonny

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