Plus, Eaton Vance launches a new fund, Columbia bond manager departs, and more.
Deflationary concerns and a flight to quality have combined to produce terrific returns for long-term government bond funds. The 30-year U.S. Treasury bond's yield has fallen from 4.64% at the beginning of the year to 3.99% as of July 8, 2010. The long bond last traded under 4% in May 2009, when deflation was at the forefront of investor concerns. This quick, sharp drop in yield has upped the returns of bond prices and long-term government bond funds.
The category's 14.94% year-to-date gain through July 7 is the best of all fund groups at mid-year. That's not close to the long-term government funds' 52.3% average 2008 gain, but it is far better than the 44.1% the typical fund in the category lost last year.
The best-performing fund is PIMCO Extended Duration
But long-term, buy-and-hold investors should beware. The only way for these funds to keep up this year's pace is for long-term bond yields to fall even further. While yields may continue to fall over the short term, with a current yield under 4%, it is unlikely these funds will make the 6% annualized nominal return the average fund in the category has posted over the last 10 and 15 years.New Eaton Vance Fund
Manager Shuffle at Columbia Strategic Income
On the heels of Ameriprise's acquisition of Columbia, Laura Ostrander has left Columbia and will no longer manage Columbia Strategic Income
Replacing her on Strategic Income are Colin Lundgren and Gene Tannuzzo (the comanagers of RiverSource Strategic Income Allocation
Invesco Announces Manager Changes
Invesco recently announced numerous portfolio-management changes in relation to its recent acquisition of Morgan Stanley's retail asset-management business. Most of the manager changes involve U.S. equity value funds.
One big new hire related to the transaction is Erik Voss, who was previously the portfolio manager of Seligman Growth