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Stop buying our bond funds, M&G tells investors
purch
Posts: 9,865 Forumite
Stop buying our bond funds, M&G tells investors
Fund manager's unprecedented move follows fears that the corporate bond market is in the midst of a liquidity crisis
http://www.telegraph.co.uk/finance/personalfinance/investing/9437631/Stop-buying-our-bond-funds-MandG-tells-investors.html
Food for thought for those with investments in Corporate Bond funds, as well as individual securities.
I have said for many years that Bond Funds have an inherent risk, in addition to the default risk.
Bond Funds do not have a maturity, and it is the maturity which gives an individual bond much of it's low risk.
Also those who have been caught up in the recent craze of buying Bonds at issue need to be aware of the potential problems highlighted in this article. If you intend to hold from issue to maturity, then it is not much of an issue, but if you need to sell your Bond it is likely that you could face problems, and often the price you see on your PC or in the paper will not be achievable in the actual market.
Fund manager's unprecedented move follows fears that the corporate bond market is in the midst of a liquidity crisis
http://www.telegraph.co.uk/finance/personalfinance/investing/9437631/Stop-buying-our-bond-funds-MandG-tells-investors.html
Food for thought for those with investments in Corporate Bond funds, as well as individual securities.
I have said for many years that Bond Funds have an inherent risk, in addition to the default risk.
Bond Funds do not have a maturity, and it is the maturity which gives an individual bond much of it's low risk.
Also those who have been caught up in the recent craze of buying Bonds at issue need to be aware of the potential problems highlighted in this article. If you intend to hold from issue to maturity, then it is not much of an issue, but if you need to sell your Bond it is likely that you could face problems, and often the price you see on your PC or in the paper will not be achievable in the actual market.
'In nature, there are neither rewards nor punishments - there are Consequences.'
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Comments
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No comments on this interesting story yet? I was keeping an eye on interest rate rises for moving out of my M&G bond funds, but there is little chance of that for a while. This is a new scenario of demand overheating?0
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Seems as if the demise of investment banking is impacting this particular market.0
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