Kiplinger's on BBH Limited Duration
In a case of bad timing, Kiplinger's Personal Finance published the piece "BBH Limited Duration: More Income, a Bit More Risk." (The fund has been crushed in the last month, declining 4.07% over the past month vs. a gain of 0.20% for its peers. See here.) The piece tells us, "Money that you need at your fingertips in the very short term should be stashed in federally insured accounts, period. But if you've got some money that you don't want to lock up long-term and that can stand a little volatility -- perhaps you've sold some stocks and you're waiting to redeploy the proceeds -- then consider an ultrashort bond mutual fund. Bonds in these funds, which typically yield more than cash accounts for a little more risk, usually come with maturities of a year or less.... BBH Limited Duration (symbol BBBMX) currently yields 1.9% -- a bit less than Standard & Poor's 500-stock index and about the same as Bloomberg Barclays U.S. Aggregate Bond index, a benchmark for the broad bond market. To build the portfolio, managers Andrew Hofer and Neil Hohmann start by screening the broad bond universe, including corporate and municipal bonds as well as bundles of loans known as securitized debt, to hunt for undervalued issues." The article adds, "Over the past decade, Limited Duration has been about 25% more volatile than the average ultrashort bond fund, but 75% less volatile than the broad bond market. The fund posted a positive return in each of the past 10 calendar years. Over the past 15 years, its 2.7% annualized return led all ultrashort bond funds." Watch for more coverage of the ugliness in the ultra-short sector in the April issue of our Bond Fund Intelligence, which ships early next week.
