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Dodge & Cox Goes Short

The firm shorts 10-year Treasury futures for the first time to control duration and hedge stakes in some long corporates.

Aug 23, 2010

Mentioned: Dodge & Cox Balanced I (DODBX) , Dodge & Cox Income I (DODIX) , AT&T Inc (T)

For the first time ever Dodge & Cox Balanced (DODBX) and Dodge & Cox Income (DODIX) are shorting U.S. Treasury futures.

The short positions, which are essentially bets against the securities, do not represent a broad wager against the Treasury market, said CIO Charles Pohl in a recent interview. Rather, Dodge & Cox is using the tactic to manage its duration (a measure of interest-rate sensitivity) and hedge positions it has taken in certain long-term corporate securities.

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Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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