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Fund Spy

Are There Stocks in Your Bond Portfolio?

Equities stung a handful of bond funds in the fourth quarter.

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Some bond fund investors received an unpleasant surprise in the fourth quarter of 2018, when stock market losses stung their bond portfolios.   

For the most part, meaningful equity stakes in bond funds are rare. Most bond fund managers stick to bonds, or hold only tiny positions in common stock that might come from a bankruptcy restructuring, or from the conversion to equity of a convertible bond. Of the 280-plus taxable-bond funds that we rate, about one in 10 held more than a couple of percentage points in stocks as of its most recent portfolio, and only a handful held more than a five-percentage-point stake.

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