GO LONG!
Among the retail accessible asset classes, this has turned into one of the biggest "kick-me's" of the year, from an asset-allocation perspective:
The so-called long bond has returned 27.8 percent this year, including a 15.6 percent gain in November, Merrill Lynch & Co. index data show. The debt is poised for the best annual performance since rallying 34 percent 13 years ago.
Yields touched 3.1789 percent today, the lowest since the U.S. began regular auctions of the securities in 1977. -Bloomberg
Morningstar reports that the average long government bond fund is half that return.
THE NASTY END OF 'DO YOU HAVE ENOUGH INFLATION PROTECTION?'
Meanwhile, TIPs have hardly been a dreamy asset class. The average inflation protect bond fund is off some 7.8%, with large funds like PIMCO's off another 4.5% beyond that... That's a lot of jazz for an asset class with an historical annual volatility between 1% and 2%. (One fund company has inflation protected funds off over 20% YTD!)
CANNERY ROW ALLOCATIONS
Last, it is noteworthy that the average, canned "Conservative Allocation Fund" is off over 23% YTD.
Personally, I cannot believe ever letting that happen to a client. You can bet that dynamic/tactical allocators, like me, won't be back in demand soon, however.... (if I'm wrong, let me know!).
No comments:
Post a Comment