Sunday, January 18, 2009

Janus US Short-Term Bond Fund

This is the other bond fund in my Mom's portfolio. It has done very well in recent years, though it didn't do much just after we bought it in 2003. I am trying to get access to Janus World's website to get more info - they haven't yet sent me a password but I managed to get the charts above from UBS's website. If it is similar to the short-term bond fund marketed in the US then it is heavy in US government issues which explains its strong performance recently. I'm thinking of selling half and putting it in Man-AHL Diversified, a managed futures fund that we only have a small allocation to at the moment (2.2%). Such a move move would take the allocation to Man AHL up to 7.5% and to the Janus bond fund down to 5.3%. The overall bond allocation would go down to 23% from 27% and the alternatives allocation up from 19% to 24%. Maybe I'd leave a bit in cash...

The rationale is that US interest rates are very low and many people are talking about a US bond bubble. On the other hand I think we should retain some exposure to US bonds and this fund seems pretty good. On the other hand, it is a short-term bond fund and so should be relatively little impacted by a rise in interest rates. And would be impacted in a good way if new bonds they buy have higher yields in the future?

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