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Why Bond Fund Returns Will Likely Disappoint

Friday, December 28, 2012 - 6:41 AM
This blog post at Oblivious Investor does a good job at explaining why bond fund returns don't have much opportunity for future improvements. Low returns or negative returns are more likely. Here's an excerpt:
when a bond fund’s yield is very low, that tells us that, for the near-term future, both of the return components are likely to be very low as well — the fund is likely to be earning a low rate of interest, and the fund can’t earn much via price appreciation, because there’s so little yield to give up.

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Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Friday, December 28, 2012 - 7:47 PM
Investors keep pouring funds into bond funds. So I guess it's a sure thing it will end as an ugly mess.
ShorebreakShorebreak2,694 posts since
Apr 6, 2010
Rep Points: 14,610