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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
158.76
-2.19
-1.36%
XOM
76.626
-0.844
-1.0891%
MSFT
72.73
-0.92
-1.25%
JNJ
133.58
-0.59
-0.44%
WFC
52
-0.69
-1.31%
GE
24.866
-0.234
-0.9311%
JPM
91.1
-0.99
-1.08%
PG
92.49
+0.05
+0.05%
PFE
33.095
-0.265
-0.794%
VZ
48.2
-0.21
-0.43%
CVX
106.22
-0.62
-0.58%
T
37.896
-0.334
-0.8747%
BAC
23.81
-0.38
-1.57%
DIS
102.04
-0.16
-0.16%
FB
167.98
-2.02
-1.19%
C
66.895
-0.815
-1.204%
MRK
62.18
-0.52
-0.83%
GOOG
916.9
-10.06
-1.09%
KO
46.07
-0.13
-0.28%
CMCSA
40.465
-0.775
-1.879%
HD
150.8
-1.45
-0.95%
GILD
72.44
-0.91
-1.24%
INTC
35.351
-0.459
-1.2812%
IBM
141.41
-1.09
-0.76%
CSCO
30.96
-1.38
-4.27%
PEP
118.7
-0.4
-0.34%
AMZN
965.385
-12.795
-1.308%
ORCL
48.775
-0.475
-0.964%
V
102.68
-0.64
-0.62%
WMT
79.55
-1.43
-1.77%
AAPL
158.76
-2.19
-1.36%
XOM
76.626
-0.844
-1.0891%
MSFT
72.73
-0.92
-1.25%
JNJ
133.58
-0.59
-0.44%
WFC
52
-0.69
-1.31%
GE
24.866
-0.234
-0.9311%
JPM
91.1
-0.99
-1.08%
PG
92.49
+0.05
+0.05%
PFE
33.095
-0.265
-0.794%
VZ
48.2
-0.21
-0.43%
CVX
106.22
-0.62
-0.58%
T
37.896
-0.334
-0.8747%
BAC
23.81
-0.38
-1.57%
DIS
102.04
-0.16
-0.16%
FB
167.98
-2.02
-1.19%
C
66.895
-0.815
-1.204%
MRK
62.18
-0.52
-0.83%
GOOG
916.9
-10.06
-1.09%
KO
46.07
-0.13
-0.28%
CMCSA
40.465
-0.775
-1.879%
HD
150.8
-1.45
-0.95%
GILD
72.44
-0.91
-1.24%
INTC
35.351
-0.459
-1.2812%
IBM
141.41
-1.09
-0.76%
CSCO
30.96
-1.38
-4.27%
PEP
118.7
-0.4
-0.34%
AMZN
965.385
-12.795
-1.308%
ORCL
48.775
-0.475
-0.964%
V
102.68
-0.64
-0.62%
WMT
79.55
-1.43
-1.77%