Tue, 25 Nov 2014
How increased merger activity shapes the risks and opportunities for this niche group of mutual funds.
Vanguard's chief economist, Joe Davis, cautions investors who turn to equities to replace bond income and also offers some vehicles for short- and long -term inflation protection.
Fears of past market crises have investors selling the category despite its wide margins of safety and outperformance over its blend and value counterparts, says Morningstar's Shannon Zimmerman.
Passive equity funds, noncore bonds , alternatives, and many of the fund shops that sell them fared well last year, while core bonds , commodities, and gold suffered.
Although fund shops often promote the strategies' differences, correlations between the two are high as healthy dividend payers also tend to be lower-volatility companies.
There are better ways to get retirement income than sacrificing portfolio diversification and balance for higher-risk assets, cautions Vanguard's Joel Dickson.
Although investors may remain broadly skeptical of equity markets, asset flow data suggest they could be taking more risk than expected in other asset classes.
Portfolio Solutions' Rick Ferri expects stocks to return 7% and bonds to yield 2% during the next decade, and he also offers tips on how investors should handle their fixed-income positions.
Despite equities' strong returns, investors remain unexcited about stocks and instead continue to put more money to work in bond funds.
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