The Fund World’s Achilles' Heel
Most of the industry’s worst moments involve fixed-income funds.
Fixed-income funds have not grabbed many headlines in recent years, and that’s a very good thing. When bond funds make big news, it almost always portends bad things for investors.
In recent years, the news has been limited to steamy, but largely incidental issues, such as egos causing managers and their shops to part ways, forcing investors to choose sides. While such moves can have tax consequences, for the most part these divorces are more painful for the parties involved than for fund shareholders. Of greater concern is when bond funds make headlines for their innovations or their asset growth, something we have seen too often over the past 30 years.