Home>Video>This Core Bond Fund Packs a Little More Punch

This Core Bond Fund Packs a Little More Punch

Tue, 4 Nov 2014

T. Rowe Price New Income is a reliable core bond fund that manages to outpace the Barclays Aggregate Index while avoiding the market's worst gyrations.

+

Video Transcript

Cara Esser: T. Rowe Price New Income (PRCIX) has been a reliable core bond portfolio that packs a little more punch than the Barclays [U.S Aggregate Bond Index]. The fund's investable universe is wider than the Barclays Agg, though it does invest heavily in U.S. Treasuries, investment-grade corporate bonds, and agency mortgages. Some of the out-of-benchmark sectors include emerging-markets corporate bonds, high-yield bonds, and asset-backed securities.

Longtime manager, Dan Shackelford allocates to these core and diversifying sectors, based on the macro views of a slate of experienced T. Rowe Price portfolio managers. Relative value of each sector also plays a role. For example, following the 2008 financial crisis, he allocated to more credit-sensitive bonds. As those bonds have rallied and become more expensive, he has allocated to more attractively valued sectors like emerging-markets corporate bonds.

Over the long term, the fund has outpaced the Barclays Aggregate Bond Index and avoided some of the fixed-income market's worst gyrations. Over the trailing 10 years, the fund has outpaced the index by 30 basis points on an annual basis. It has also outperformed two thirds of its intermediate-term bond peers. Add to that a below-average expense ratio and this fund is a keeper.

  1. Related Videos
  2. Related Articles
  1. T . Rowe Price's College-Savings Plan Earns an A+

    This Gold-rated 529 plan offers a stellar suite of T . Rowe Price funds.

  2. 4 High-Profile Manager Changes

    What to make of recent changes at T . Rowe Price , Fidelity, Artisan, and First Eagle.

  3. 2 Free-Ranging Emerging-Markets Bond Funds

    TCW Emerging Markets Income and T . Rowe Price Emerging Markets Bond have used their ability to invest in dollar and local currency bonds wisely.

  4. This Bond Fund Adeptly Navigates Emerging Markets

    Bronze-rated T . Rowe Price Emerging Markets Bond blends a top-down macro view with thorough bottom-up security selection to generate top-quartile results.

  5. 2 Muni Fund Picks That Sidestep Market Turbulence

    Fidelity Municipal Income and T . Rowe Price Tax-Free High Yield hold up well when muni markets head south.

  6. Top Bond -Fund Picks for Retirees

    Morningstar's Eric Jacobson runs the gamut with some of his favorite fixed-income funds, including ideas for core, short-term, multisector, high-yield, and muni exposure.

  7. Sizing Up 2 Balanced Fund Picks at T . Rowe

    T . Rowe Price Balanced offers cheaper, more-streamlined access to the company's proven allocation strategy, while Personal Strategy Balanced dips into more-specialized pockets of the market.

  8. 6 Elite Muni Funds

    Morningstar's Beth Foos shares some of our top picks for tax-sensitive investors seeking short-term, longer-term, or high-yield muni funds.

©2017 Morningstar Advisor. All right reserved.