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The Bond Pickers Strike Back – Bloomberg Gadfly

by 

It’s generally been a terrible few years for humans who pick bonds for a living.

Clients both big and small have sent them a sobering message that they’re usually not worth the money they’re paid. Investors have yanked billions of dollars from active, higher-fee strategies, or those guided by human decision-making, while pouring cash into cheaper funds designed to mirror indexes.

Ditching Human Decisions

Investors have broadly favored passive funds over active ones in the past year.

A Bloomberg article on Tuesday highlighted just how far this trend has gone. Pensions are increasingly abandoning hedge funds and other more expensive strategies, sometimes in favor of index funds.

But suddenly, as global bond markets reel in the wake of Donald Trump’s election as U.S. president, managers of active bond funds are soundly beating broad benchmarks.  Read More…

AAPL
146.28
+0.65
+0.45%
XOM
81.61
+0.53
+0.65%
MSFT
71.21
+0.95
+1.35%
JNJ
136.43
+0.38
+0.28%
WFC
52.45
-0.04
-0.08%
GE
27.57
+0.02
+0.07%
JPM
86.86
-0.16
-0.18%
PG
89.42
+0.39
+0.44%
PFE
34.17
+0.11
+0.32%
VZ
45.39
-0.03
-0.07%
CVX
105
+0.55
+0.53%
T
37.95
-0.15
-0.39%
BAC
22.82
-0.11
-0.48%
DIS
104.36
+0.14
+0.13%
FB
155.07
+1.67
+1.09%
C
63.41
-0.21
-0.33%
MRK
66.16
+0.14
+0.21%
GOOG
965.59
+8.5
+0.89%
KO
45.25
+0.18
+0.40%
CMCSA
39.5
-0.44
-1.10%
HD
151.31
-4.17
-2.68%
GILD
70.52
+0.04
+0.06%
INTC
34.19
-0.17
-0.49%
IBM
154.11
-0.29
-0.19%
CSCO
32.09
+0.24
+0.75%
PEP
116.96
+0.81
+0.70%
AMZN
1003.74
+2.44
+0.24%
ORCL
50.95
+0.65
+1.29%
V
95.58
+1.63
+1.73%
WMT
74.84
-0.68
-0.90%
AAPL
146.28
+0.65
+0.45%
XOM
81.61
+0.53
+0.65%
MSFT
71.21
+0.95
+1.35%
JNJ
136.43
+0.38
+0.28%
WFC
52.45
-0.04
-0.08%
GE
27.57
+0.02
+0.07%
JPM
86.86
-0.16
-0.18%
PG
89.42
+0.39
+0.44%
PFE
34.17
+0.11
+0.32%
VZ
45.39
-0.03
-0.07%
CVX
105
+0.55
+0.53%
T
37.95
-0.15
-0.39%
BAC
22.82
-0.11
-0.48%
DIS
104.36
+0.14
+0.13%
FB
155.07
+1.67
+1.09%
C
63.41
-0.21
-0.33%
MRK
66.16
+0.14
+0.21%
GOOG
965.59
+8.5
+0.89%
KO
45.25
+0.18
+0.40%
CMCSA
39.5
-0.44
-1.10%
HD
151.31
-4.17
-2.68%
GILD
70.52
+0.04
+0.06%
INTC
34.19
-0.17
-0.49%
IBM
154.11
-0.29
-0.19%
CSCO
32.09
+0.24
+0.75%
PEP
116.96
+0.81
+0.70%
AMZN
1003.74
+2.44
+0.24%
ORCL
50.95
+0.65
+1.29%
V
95.58
+1.63
+1.73%
WMT
74.84
-0.68
-0.90%