3 Funds That Go Their Own Way
Here are a few fixed-income prospects to watch.
Since the start of the year, various subsectors of the fixed-income markets have ridden waves of unexpected news. Oil prices dipped below $30 a barrel, stressing many high-yield energy companies. Yields across the broad investment-grade fixed-income landscape have continued to tumble to record low levels. As of July 26, 2016, the 10-year U.S. Treasury sat at a modest 1.56%, while the German and Japanese 10-year equivalents offered negative yields. Negative yields have pushed yield-seeking investors around the globe into new territory. For example, some investors outside of the United States have even scooped up U.S. municipal bonds, viewed as a high-quality, positive-yielding substitute for negative-yielding government bonds elsewhere, even though they can't take advantage of the tax benefits.
While the current environment continues to challenge conventional bond-investing wisdom, the following three young fixed-income funds from our Morningstar Prospects list are noteworthy because they approach their markets in unconventional ways. In addition, each of these funds has compelling fundamental attributes--whether experienced management teams, strong investor-focused parent firms, or attractive fee profiles--that make them worth a look.
Emory Zink does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.