https://www.financial-planning.com/list/bond-funds-with-the-worst-15-year-returns
Bond funds with the worst 15-year returns
By Andrew Shilling
All of the fixed-income industry’s worst long-term performers recorded gains over all time horizons, with only one in the red so far in 2021.
The 20 worst-performing bond funds of the past 15 years, with at least $100 million in assets under management, notched an average gain of nearly 1.5%, Morningstar Direct data show. Over the past 12 months, the same funds — all actively managed like those in last week’s top-performers ranking — had an average return of 2.28%.
With Treasury yields hovering around 1% over the better part of the decade, Amy Magnotta, co-head of discretionary portfolios at Brinker Capital Investments, says it’s no surprise that the industry's shortest-duration bond funds had a large presence.
“All of the funds on the list with the worst 15-year returns are short-term bond funds, both taxable and municipal,” Magnotta says, adding, “The yield on the one-year Treasury bill has averaged just 1.16% over the last 15 years, and it spent most of the time period below 1%, which is not an attractive starting point for returns of shorter maturity securities.”
For comparison, the iShares Core U.S. Aggregate Bond ETF (AGG), which has a 0.04% net expense ratio, recorded a 15-year gain of 4.29%, data show. Over the past year, the fund had a gain of 0.60%. The iShares 2-3 Year Treasury Bond ETF (SHY), which tracks the ICE BofA 1-3 Year Treasury Index, had 1- and 15-year gains of 0.17% and 2.2%, respectively.
In stocks, the SPDR S&P 500 ETF Trust (SPY) and the SPDR Dow Jones Industrial Average ETF (DIA) have had 15-year returns of 10.30% and 10.32%, respectively. In the past 12 months, SPY and DIA had gains of 48.69% and 44.79%. The funds have net expense ratios of 0.09% and 0.16%.
Fees among bond funds in this ranking were higher than the industry average. With an overall net expense ratio of 0.58%, funds here were only slightly pricier than the 0.45% investors paid for fund investing in 2019, according to Morningstar’s most recent annual fee survey.
When discussing bond fund performance over any time horizon with clients, Magnotta says it’s key to also have a conversation about their role in a diversified portfolio.***
Anyone owe these lemons?

@davidmoran @catch22 "You want some "whine" with that cheese?"
Yes, all valid points. I'm luckier than most. MY point is: if the pension fund's investments grow by 8% or whatever, why wouldn't we get a raise in the neighborhood of... say, 6%? Jeez. SOME years, we do better than that customary 2% COLA. But that's not happened in the past decade or so.
Yer not gettin' that cheese by ME, "Meat."
https://getyarn.io/yarn-clip/0b882df6-df18-4299-9a13-64be3436dd4c

@Old Joe, did you look at the graph in the article? I think you're right, in the sense that energy is a lot more volatile than food and is most responsible for CPI swings. Just googling around a bit for that info, it does look like food at least since 1968 has been pretty much one-way.
However, just an anecdote, I remember well several years back when dairy prices fell a lot in a short time and stayed there for a couple of years before rising, slowly, again. The happy shock was seeing the 1/2 gal organic milk we used to buy going from $3.50 to $3.00 from one shopping trip to the next - a 14% drop. Maybe something to do with price supports caused that, dunno.
Best, AJ

@Crash
You want some "whine" with that cheese?

Most years, my (private) pension fund likes to boast about how well its investments are doing. And most years, we get a lousy 2% raise.

Point 1. You have a pension with a COLA. Really Cool.
Point 2. You have a pension. Cool.
Point 3. Some folks have a pension w/o COLA. Not cool
Point 4. Many folks have no pension. Not cool at all.
The Beach Boys would sing that you should be feel'in, "Good Vibrations".

Most years, my (private) pension fund likes to boast about how well its investments are doing. And most years, we get a lousy 2% raise.

uh
wtf is lousy about a 2% raise?

”I I was wonder if the article,From Randall W. Forsyth - Barron’s April 26, 2021, had anything to say about union pension funds?”

@Derf - Sorry, no mention of union pension funds. The weekly Forsyth column tends to ramble, hitting on a lot of different topics - but not delving deeply into any.
BTW - He used the term “corporate pension fund” (not “private” as I earlier stated). That 98.4% figure is just for the 100 largest among them. I’d quote lines if possible, but can’t pull up much of the article on the web. Kindle subscriptions can’t be cut / pasted - at least based on many attempts over the years to do it.

Most years, my (private) pension fund likes to boast about how well its investments are doing. And most years, we get a lousy 2% raise.

@hank ; I was wonder if the article,From Randall W. Forsyth - Barron’s April 26, 2021, had anything to say about union pension funds ? My local union has been trying for a number of years to raise the total funded % up. It seems at contract time more money is added, but seems only to keep the fund just above the needed level.
Sorry to stray from topic.
Thanks , Derf

I heard years ago on NPR that less than half of tax filers end up actually paying. That's due to credits and deductions, of course. Yet we continue, seemingly forever, to dance around the bigger problems. And what if some or many of those deductions and credits became moot because our society became more equitable, generally, eh?

Thanks @bee for this and all the great interviews you continuously dig up and share.
Haven’t followed Mr. G lately. He was a pretty “hot” fund manager a few years ago. Sounds to me like he’s just “biding his time” waiting for an opportunity to pounce (investment wise) on the next big opportunity to come along.
Sounds all the alarm bells (mostly the conservative line): High debt, market overvaluation, dismally low interest rates, “elitists” running the country, welfare state, no place to hide and a “Fed” that’s acting irresponsibly - possibly illegally. Hence, he suggests PRPFX might be as good a hiding place as anywhere else (better than most) because virtually anything might happen next and PRPFX covers all the bases (though he doesn’t get the exact allocation right).
Dunno. He’s frustrated because it’s hard to make $$ in these markets, Sounds stressed out. But I enjoyed following his rambling chain of thought. I think if folks listen carefully and critically they might take away a few bits of investment wisdom. But be careful not to swallow hook line and sinker everything he says. Could cost you.

Not sure what Super Core Inflation means (I didn't read the article) but I've tried to set myself up for potential or maybe inevitable inflation over the next couple of years. As I look, I have about 12% of my self managed portfolio in inflation hedges; DBC, a broad basket of commodities, IAU gold, UDN, an inverse US dollar hedge and IVOL, TIPS with a special hedging sauce that seems to smooth the ride. Time will tell if these ETFs help my cause if inflation starts to rise significantly.

Yes, this is Turkish crypto founder; but.....
Article, regarding the closure of this organization.
I also recalled this from 2 years ago in Canada and locked out investors. I have not performed a follow-up.

You can argue that all the bad news is factored into India and Brazil BUT each is only down by 5 to 6% YTD and compared to loss 50% March 2020. If their covid rates are skyrocketing, the impact on local economy is hard to predict. Agree DCA would be wise, but if you wait till "all clear " it will be late. I would not use money you need for anything in the next 3 years.
There is an increasing consensus that the Chinese vaccine is almost worthless with efficacy of just 50% apparently just beating WHO requirements ( why does that not surprise me?) JNJ vaccine will be much better bet for EM despite very rare Cerebral vein thrombosis issues. But it will take months to roll out

Howdy folks,
I've tried to follow his advice since his book, what 20 years ago? It includes doing your homework as mentioned above, but it goes further. He posited in his book that each and every person has some bit of knowledge that can be exploited in the market. Listen, hear, watch, study, and most importantly ACT. You don't have to bet the mortgage but ACT. Do something positive on your little bit of data.
and so it goes,
peace and keep wearing the damn mask,
rono

Quite right, @hank. Except for a very few stocks I've been monitoring for YEARS. At this point, in retirement, there is NO single-stock that's good enough to compel me to invest at the WRONG time. Like right now, with valuations through the roof. But when the time comes, I'd love to reap the benefit of my homework. I would like for the effort not to be theoretical anymore.

You would think since it has been working fine for years they could leave well enough alone

One of their portfolio managers is interviewed in this week’s Barron’s.
Since they like gold, I ran a comparison of their Global fund SGENX with PRPFX. At the 3 and 5 year point, PRPFX has the better performance record. At 10 years out they’re tied (8.5% annually). To a considerable extent this is comparing apples & oranges. But, considering the substantial difference in ER, I wouldn’t be encouraged to send First Eagle my money.

"...Regarding Crash's concern about the frequency and certainty of dividends: there is little special about CEFs in this regard. OEF bond funds may declare dividends annually (e.g. LSGLX), quarterly (e.g. BEGBX), monthly (e.g. VTABX), or even oddly (e.g. FBIIX in April, June, Oct, Dec).
With OEFs you are left "waiting around to see IF a quarterly dividend were declared." BEGBX "generally expects to pay distributions of substantially all of its income, if any, quarterly, but may pay less frequently" (per prospectus). In reality, it has paid income dividends only three times in the past five years!"
*******************************************
Yes, all of that's true. It's all rather variable, or at least it CAN be. That's why I look to see the past pay-out pattern on the calendar for Fund X or Y or Z. It's quickly clear what schedule they're following. Deviations from a customary quarterly or monthly distribution schedule cause me simply to check out other, more reliable prospects. For example, I note that MAPIX and MAINX have not been "Steady-Eddies" in following a dividend pay-out schedule in the past year or two. And the amounts of the divs. vary widely. I don't own Matthews, but I track it.

I agree with Sven that posts would be more helpful if they included some comment about why the poster found an article or fund interesting.
carew388 identifies one of the first two questions I ask specifically about CEFs. The other is the amount of leverage, since CEFs are often highly leveraged. This information is easy to find ...
Leverage is 20% (CEF Connect), and DLY started its short life with a nearly 10% premium before plunging in fall 2020 to a 10.5% discount (per M*) and then settling in to a "not substantial[]" discount still greater than any of the dozen other leveraged multisector funds in the CEF Connect database.
Regarding Crash's concern about the frequency and certainty of dividends: there is little special about CEFs in this regard. OEF bond funds may declare dividends annually (e.g. LSGLX), quarterly (e.g. BEGBX), monthly (e.g. VTABX), or even oddly (e.g. FBIIX in April, June, Oct, Dec).
With OEFs you are left "waiting around to see IF a quarterly dividend were declared." BEGBX "generally expects to pay distributions of substantially all of its income, if any, quarterly, but may pay less frequently" (per prospectus). In reality, it has paid income dividends only three times in the past five years!
According to CEF Connect, DLY pays monthly, and is a managed payout fund that has paid the identical amount in each of the 11 months of its short lifetime.
Little of this raw data says why one might be interested in this fund.

" In theory, negative yields could translate into returns if inflation climbs persistently in coming years."
Those negative real yields are still going to be negative. If inflation runs at 2% so you get 2% added to the value of your TIPS annually, you have a security that's grown an extra 2%/year in nominal terms, but 0% extra in real terms. Your real return is unchanged. Same at 5% or any inflation rate.
TIPS "win" with higher inflation primarily in the sense that they protect you against loss of value due to inflation, while "regular" (nominal rate) Treasuries lose value faster and faster as inflation climbs.
If inflation runs exactly as priced into the market, TIPS should slightly underperform "regular" Treasuries, since you're paying a little for that inflation insurance. If inflation runs higher than is priced into the market, you win, but only relative to the "regular" Treasuries.

A concern arises, however, when the [regular Treasury bond] investment earns 4% and inflation is running at 3%. This means that the real rate of return – the stated return minus inflation – is only 1%. A bond investor locks in the money for a period of time and commits to a specific income stream, but if he underestimates inflation, future proceeds from his investment may have less purchasing power.
Unlike nominal bonds, TIPS are designed to offer a real rate of return and, hence, provide investors a certain amount of protection against inflation. By investing in TIPS, investors give up the certainty of a predictable income stream for the assurance that their investment will maintain its purchasing power in case of rising inflation. For that assurance, TIPS pay slightly lower interest rates than comparable maturity Treasury securities.

https://www.raymondjames.com/wealth-management/advice-products-and-services/investment-solutions/fixed-income/taxable-bonds/tips-treasury-inflation-protected-securities
Again, the negative real rate comes from buying a bond for $105 that has a current face value of $100 and after a decade and inflation still has a real purchasing power of $100. The inflation adjustment protects against declining purchasing power of the $100; it doesn't protect against the $5 loss of value from buying at a premium.