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Fund Times

A Flexible Approach to Fixed Income

More flexible mandates for bond funds may offer more investment options, but it also may introduce complications, managers say.

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This analyst blog is part of our coverage of the 2017 Morningstar Investment Conference. 

The low bond yields of the past few years have left investors questioning what will happen with their core bond portfolios when yields rise. This anxiety, in turn, has fueled discussion around embracing bond funds with more flexible mandates. This flexibility can take a variety of forms--wide-ranging duration, a broader sector menu, equitylike exposures through convertible bonds and bank loans--and while it expands the menu of investment options for a bond fund to generate value, it may also introduce complications.

Emory Zink does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.