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Fund Times

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.

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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 shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.