Crane Data, which has published its flagship Money Fund Intelligence newsletter since 2006, is in the process of launching a new publication, Bond Fund Intelligence. Our latest monthly newsletter, which has been in "beta" testing the past two months, covers bond funds (including ETFs), with an initial focus on the ultra-short end of the spectrum. Bond Fund Intelligence includes news, features, and performance data on over 150 (up from 88 last month) of the largest bond funds. Crane Data also offers an Excel "complement" with even more performance, data and rankings, Bond Fund Intelligence XLS. BFI also includes our new Crane BFI Indexes, which will provide benchmarks for various bond market segments, including a new Conservative Ultra-Short BFI Index, a more focused benchmark for the more conservative funds in the space just beyond money market funds. While the official launch of Issue No. 1 is set for mid-January, Crane Data recently sent out its second "beta" edition to subscribers. (Let us know if you'd like to see a copy.)
The December "beta" issue of Bond Fund Intelligence features the articles: "Bond Funds Have Another Big Year; Will Party End in 2015?," an introduction to BFI and a review of year-to-date asset totals; "BFI Profile: Guggenheim's Belden Talks About GSY," an interview with William Belden, managing director and head of product development and management at Guggenheim Investments; and our monthly, "Bond Fund News, which recaps the month's biggest bond fund stories. We also include a number of bond fund rankings and full tables with Nov. 30, 2014, performance statistics, as well as our Crane Bond Fund Indexes.
Our lead "Bond Funds Have Another Big Year" article explains, "Welcome to our 2nd "beta" issue of the new Bond Fund Intelligence! Crane Data, which publishes Money Fund Intelligence and information on money market mutual funds, is launching a new suite of products that track bond funds. Our initial focus is on the conservative, ultra‐short segment of the market, where we hope to produce more focused peer groups and averages. But we intend to keep expanding our coverage (this issue has 150 funds vs. 88 in our first "beta" issue and is 8 pages instead of 4), and we'll continue to refine our data collections throughout the coming year."
It continues, "2014 appears to be yet another year of big asset gains for bond funds. Assets have increased by over $200 billion YTD through October (according to ICI's statistics), and they've increased by almost $2 trillion since 2008. Given the big inflows into bonds since the zero rate regime started, we don't expect 2015 to be pretty, if indeed rate hikes are in the cards. Nonetheless, interest in the short-term space should continue to build as MMF reform approaches in 2016."
In our monthly BFI "profile," we interviewed Guggenheim's William Belden, managing director and head of product development and management at Guggenheim Investments. We asked Belden about the launch and positioning of Guggenheim's Enhanced Short Duration ETF and its place in the changing cash management industry. On the firm's history and the fund's background, he said, "Guggenheim was founded in 1999 and has about $220 billion in assets under management with about $140 billion in fixed income. The short duration part of that space is a meaningful chunk of that asset base. The Guggenheim Enhanced Short Duration ETF (GSY) originally was launched as a passively managed index-based ETF in 2008 then switched over to an active strategy in 2011. I have been with Guggenheim since 2009."
On how GSY has been received, Belden said, "Assets and recognition for the GSY strategy started to take off at the beginning of 2012. We're now at about $530 million in assets. We have been very pleased with the performance and the acceptance of the product, but we still feel like we're scratching the surface of what the opportunity ultimately presents us with. We present GSY as a cash alternative, and certainly something that is appealing from a yield perspective in comparison to money market funds or other cash vehicles. We talk about the fact that 90 to 100 basis points in nominal terms, given the risk/return profile of GSY in contrast to other cash investments, is pretty appealing -- and that has resonated. I think GSY fills a very nice sleeve." (Watch for more of the BFI Guggenheim "profile" in coming days.)
In our "Bond Funds News" section, we cover a variety of stories, including, "Bond Funds Hoard Cash." It says, "An article in The Wall Street Journal, entitled, "Bond Funds Load Up on Cash," says "[L]arge bond funds are holding the most cash since the financial crisis as portfolio managers brace for potential price swings and unruly trading ahead of an expected Federal Reserve rate increase in 2015." Citing Morningstar, the article says the 10 largest U.S. bond funds held an average of 6.6% of their portfolios in cash -- twice as much as 2013 and the most since 2007. It adds, "Adding cash can hurt fund performance but is just one strategy bond managers are using to shore up their funds' defenses in preparation for a turn in investor sentiment."
Also in the news, "Gross's New Bond Fund Tops $1B." The news brief says, "Since Bill Gross defected from PIMCO to Janus in late September, assets in the fund he manages, the Janus Unconstrained Bond Fund, have topped $1 billion, reports The Wall Street Journal. Investors poured $770 million into the fund in November, on top of the $364 million to total $1.2 billion. It had a mere $12 million when he arrived. Gross's former fund, PIMCO Total Return, had $290 billion in assets as of May 2013, writes the WSJ. It has seen $60 billion in outflows since Gross left."
Crane Data's December BFI XLS with Nov. 30, 2014, data shows total bond fund assets at $1.175 trillion. Just 7% of this asset total was in the Ultra-Short segment of the market; Crane Data shows a mere $22.3 billion in our new Conservative Ultra-Short Bond Fund category and $59.3 billion in our Ultra-Short category. The Crane BFI Index, which tracks 150 bond funds, was yielding 1.44%. The BFI Conservative UltraShort Index yields 0.78%; BFI UltraShort Index yields 0.84%; BFI Short-Term Index yields 1.42%; BFI Intermediate-Term Index yields 2.16%; and BFI Long-Term Index yields 2.41%. The 5 largest bond funds in the BFI universe, as of Nov. 30, include: PIMCO Total Return Inst ($162.8B), Vanguard Total Bond Market 2 Index ($54.4B), Vanguard Total Bond Market Index ($53.4), PIMCO Income Inst ($40.4B), and DoubleLine Total Return Inst ($37.8B). Contact us for a sample issue or more details. Bond Fund Intelligence is $500 a year (1-3 users), or $1,000 a year including the BFI XLS "complement".
