Fixed-income investors should consider playing defense because of potential credit problems or a spike in rates, but there's a risk of being too conservative, as well, says Morningstar's Russ Kinnel.
Despite equities' strong returns, investors remain unexcited about stocks and instead continue to put more money to work in bond funds.
May was the worst month in over a year for flows to U.S. equities, while many core bond funds are receiving inflows as rising-rate concerns abate.
During his keynote presentation at the Morningstar Investment Conference, the PIMCO manager made the case that high debt levels and a need for financial stability mean that central banks should keep real rates close to zero for some time.
Sins of omission are still sins.
Janus, DoubleLine, and Goldman Sachs are among the latest to try their hand at strategies that aim to defy rising interest rates.
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