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December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

The Four Best Bond Funds to Own Now

By Steven Goldberg





Bond yields have nowhere to go but up, and that means bond prices will fall. These funds take unconventional approaches to avoiding losses and boosting returns


JewishWorldReview.com | Navigating today's bond market is a treacherous business. Bonds, in my view, are in a bubble. Yields are too low and when they rise, as they surely will, prices of most bonds will fall. No one can tell you when the next bond bear market will begin, but it will pay to be prepared. This article offers my best picks for avoiding losses, and making small profits, when bond yields begin a sustained rise.

Contrary to all expectations, the bond market has stormed ahead so far this year--that is, yields have fallen and prices, which move in the opposite direction of yields, have climbed. The best performers have been high-quality, long-term bonds. Case in point: So far in 2014, Vanguard Long-Term Treasury (symbol VUSTX) has returned a sizzling 10.1%.

The Vanguard fund yields a meager 3.1%. That's just about what inflation has averaged annually over the long term. If consumer prices rise by that much over the next 20 or 30 years, you'll probably earn no more than the fund's yield over that period, allowing you to break even in real terms.

That's the optimistic case. What's the downside? Consumer prices could rise at a faster pace, which would almost certainly push up bond yields. Indeed, because yields are so low today, they're likely to rise without any appreciable increase in the inflation rate. Should yields on bonds of similar maturities rise by one percentage point, this fund's price will plunge a jaw-dropping 15.3%. That's, of course, without even considering the impact of inflation. So much for the safety of Treasury bonds.

Unfortunately, the odds of yields staying flat or falling are negligible. Thanks to the Federal Reserve's actions, bond yields are far below their historical averages.

With the economy continuing to grow and the Fed gradually taking its foot off the easy-money pedal, bond yields have nowhere to go but up. That means that bond prices will fall.

The risks aren't confined to Treasuries. Junk bonds, which are issued by companies that stand an above-average chance of defaulting on their obligations, are perilously pricey. On average, junk bonds yield only about 3.8 percentage points more than Treasuries. Martin Fridson, a longtime junk bond analyst, says that high-yield bonds have gone from "extreme overvaluation" to "very extreme overvaluation."

Thanks to fears of deflation and the actions of central bankers almost everywhere, yields are low across the globe. Portugal, which appeared headed for default two years ago, now pays about 3% interest on ten-year government bonds. Spain and Italy both pay less than 2.5%--about the same, stunningly, as Uncle Sam pays on Treasuries. Japan and Switzerland pay less than 1%.

Below are my picks for the best funds for this dangerous market, listed from lowest risk to highest risk. To try to boost returns, these funds delve into odd corners of the bond world. None takes a conventional approach to bond investing.


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FPA New Income (FPNIX) aims first and foremost not to lose money. Since FPA took over the fund in 1984, it has never suffered a down year, although it has lost money in about 15% of all months. Lead manager Tom Atteberry has positioned the fund for rising rates. He owns a slew of bonds and mortgage securities with below-investment-grade credit quality. Average credit quality of the fund's holdings is triple-B, slightly above junk status. The fund, which yields 3.5%, can expect to lose a mere 1.5% of its value should bond yields rise by one percentage point. Over the past five years, the fund returned an annualized 2.2%, compared with 5.1% annualized for Barclays U.S. Aggregate Bond index, which has benefited during a period of generally falling yields. Expenses are 0.58% annually.

Metropolitan West Unconstrained M (MWCRX) takes a proven strategy and removes the risk (and the opportunity) from falling yields. The fund's three managers have successfully piloted Metropolitan West Total Return M (MWTRX), a more conventional bond fund, since 1997. Unconstrained invests similarly--with one big difference: It sells some Treasuries short to minimize interest-rate risk. If interest rates rise one percentage point, the fund is positioned to lose only about 1% in price. Unconstrained owns a stew of low- and high-quality corporate bonds and mortgages. Average credit quality is double-B, putting the fund's holdings in junk bond territory. Since its inception in late 2011, the fund has returned an annualized 11.0%, compared with 2.4% for the Barclays Aggregate index. Expenses are 0.99% annually and the yield is 1.8%.

RiverNorth/Oaktree High Income (RNOTX) is one of the few ways for individuals to access the junk-bond expertise of Oaktree Capital Management, a highly regarded institutional money manager. The fund invests three-fourths of its assets in junk bonds and senior bank loans. The rest is managed by RiverNorth, which invests in income-oriented closed-end funds (closed-end funds trade on exchanges just like stocks). All told, about 80% of the fund's assets are in junk-rated securities. The fund would lose about 3% of its value if yields were to rise one percentage point. It yields 4.0%. One big negative: Expenses are high, at 1.60% annually. Since the fund's inception at the end of 2012, it has returned an annualized 7.3%.

Vanguard Convertible Securities (VCVSX) invests in hybrid securities that feature the attributes of both bonds and stocks. Like bonds, they pay a fixed rate of interest. But, as the name implies, convertibles can be converted into stock at a preset price, so their value often rises and falls with movements in the price of the issuing company's stock. Almost all convertibles have junk credit ratings, but this fund has a nearly unblemished record of avoiding bonds that default. Although the fund's name doesn't say so, Oaktree manages Vanguard Convertible. Over the past five years, the fund returned an annualized 13.8%. Annual expenses are 0.63%, and the yield is a modest 1.9%. I really like this fund, but it's about three-fourths as volatile as Standard & Poor's 500-stock index, so this is hardly a low-risk vehicle. You can only buy the fund directly from Vanguard.

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Steven Goldberg is a Contributing Columnist for Kiplinger.



All contents copyright 2013 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC

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