Tuesday, 02 August 2022 02:24

Active fixed income fund invests cash largely in bonds

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An active fixed income fund, which is an actively managed bond fund, socks money mainly in bonds, according to zurich.ie. They’re issued by eurozone governments and bond-based financial instruments. It doesn’t stop there, however. Additionally, they can be invested supranational bonds and other investment grade corporate and non-sovereign bonds.


Parachuting inflation has translated into tumultuous equity markets, prompting the Federal Reserve Board to hit the gas on interest rates, according to etftrends.com. Against that backdrop, the spotlight’s on both fixed income and active management. 


This shouldn’t prompt even a raised eyebrow, based on data. When markets were most turbulent in 2020 and 2021 --- more so in fact than they’ve been inn decades – not even half of almost 3,000 active funds experienced superior performances over their average passive counterparts during the 12 months through June of last year, based on Morningstar data. 


While passive equities strategies generally have gotten the best of active managers, active bond managers have returned the favor on passive fixed income strategies, according to a report from Guggenheim Investments. 


More broadly, the average active large cap equity fund manager’s gotten the upper hand on the S&P 500 86% of the time over the past decade, the site continued. 

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