I was checking on Schwab's beginning of the year bond market outlook to see how they were doing. They said (my interpretation):
1. TIPs better value than Treasuries (TIP = 2.88%)
2. MBS = limited upside (MBB = 2.21%)
3. Investment Grade Corporates add value (LQD = 3.59%)
4. Muni bonds are still attractive (MUB = 2.50%)
5. Junk has run its course (JNK = 6.16%)
6. Weak dollar driving International bonds (FAX = 6.37%).
For reference purposes AGG (basically total bond market = 2.69%).
In parentheses are corresponding ETF returns through month-end April from Morningstar (exception is FAX, a closed end fund). I sort of check this kind of thing for fun. Short-term results are almost meaningless in the investment markets. It does, however, point out some misses. If you got out of high yield, you are not a happy camper.
Also, looking at other funds, the payout for taking on the risk of investing out at the longer part of the curve has been marginal year-to-date.
I may or may not own these funds. This is for informational purposes only.
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