Portfolio & Corporate Bonds #2

Thrugelmir

Rollinghome wrote: »

Is there much of a case for UT bond funds in normal times anyway?

The exceptional once in a lifetime circumstances since March have pushed bond funds sky high but even now the average return over 5 years has been just half the return on cash and has rarely exceeded cash throughout. Bonds held directly may make more sense but those TERs that can be up to 1.5% make a whacking dent on such small returns.

Totally agree. That's why holding a fixed % in different asset classes or geographical spreads etc is to rigid. Rather like climbing a mountain, the road zig zags and doesn't head straight for the top. As opportunities arise you bag them while available and then invest a higher % of "new" money into a different sector. That way your portfolio remains balanced.

Last December/January some Investment Trusts with "A" grade corporate bond holdings ( with a mix of high yield blue chip shares) were yielding around 12%. Now they are down to 5.5%-7% yield.