For every manager like Loomis Sayles’s Dan Fuss, betting on corporate bonds, believing defaults will be rare in a strong economy, another is adding less-glamorous mortgage securities that allow for more weakness. The fund is still adding corporate bonds, confident that credit conditions are solid, Ms. Stokes say. The managers also are skeptical of developed-market non-U.S. corporate debt. The fund is overweight (relative to its benchmark) in corporate debt, including high-yield, emerging-markets bonds and asset-backed securities. Heading into spring, the fund was beginning to increase exposure to investment-grade corporate bonds and shave exposure to junk, he says.

Source: Wall Street Journal June 05, 2017 02:08 UTC