This is the key to outperforming in the bond market, Pimco fund manager says

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Active equity fund managers have lagged the S&P 500 for nine years in a row. But, one expert that manages $300 billion in bond assets says active management in the Treasury market tells a different story.

div > div.group > p:first-child"> But, one expert that manages $300 billion in bond assets says active management in the Treasury market tells a different story.

Pimco's actively-managed bond ETF has outpaced over the past three months with a gain of more than 2%; the TLT Treasury bond ETF and the AGG iShares Bond ETF are up around 1.5%. Over the past three years, the AGG ETF is down 2%, while the BOND ETF is down just 0.5%. The BOND ETF holds 60% mortgages, 25% investment grade credit, 10% U.S. government bonds, and 4% high-yield credit. Schneider says the ETF is overweight"higher-quality assets that produce income," such as mortgages, while being underweight corporate credit.

"As active managers, we're not simply trading to trade," he said."You're trading to produce capital appreciation. So you're hoping to buy cheap bonds, selling them when the appreciation happens on the rich side."

 

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I got this one! It's 'buy low - sell high', right? Then I read the article... 'So you're hoping to buy cheap bonds, selling them when the appreciation happens on the rich side.' I was RIGHT!! I get that confused with 'buy high - sell low'. So did I win the internet for the day?

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