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Tuesday, May 5, 2015

It Seems Bond Investors Are Getting Smarter

WSJ journal reports that the Vanguard Total Bond Market Index fund has replaced Pimco Total Return (under new management replacing "Bond King"Bill Gross)

Seems many investors have not followed  Bill Gross to Janus Funds. Nor have they flocked to Doubline manager Jeffrey Gundlach's proclaimed by many to be the new "Bond King  as in a Bloomber artic. \They  moved to the Vanguard's index fund. This despite the creation of an ETF.under Gunlanch's management.

It seems investors realize that a core bond  holding should be more than a big bet on a star managers future successes. Items like these below no doubt contributed to their thinking.

Learning that their fund manager might hold big short positions on German Bunds like Bill Gross(and find out via a tweet)

Bill Gross says German bund is ‘short of a lifetime’

In fact, Gross went as far as to call the 10-year benchmark German Bund “the short of a lifetime” in a Tweet Tuesday.

or  Puerto Rican mutual bonds like Jeff Gundlach J

DoubleLine's Gundlach recommends buying Puerto Rico munis

from a CNBC article about his ETF
This is an active managed bond ETF, with bonds picked by Gundlach's team. It will consist mostly of investment grade debt like U.S Treasurys and various flavors of mortgage-backed securities, but it could also include corporate high yield debt, and even some emerging market debt. This is active Gundlach and his team can change the investment mix.

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