My fellow Reuters blogger Felix Salmon wrote about his lunch with the bond fund managers Loomis Sayles yesterday.
Bond fund managers generally are not keen on self directed investors. They believe that they are the best managers of investors’ fixed income assets. And some of Felix’s blog post reflected that.
The darkness and complexity of bond markets has served bond mutual funds well. Generally retail investors, unless they have high net worth and a knowledgable advisor or broker, tend to allocate the “fixed income” portion of their assets into bond funds. This is unlike the equity markets, where many investors feel confident buying individual stocks.
I’ll write another day on why bond mutual funds are not necessarily in the best interest of investors. That involves an academic literature search that I’m not up for today.
But I would like to highlight a new effort that will help rationalize the market and make muniland more profitable for retail investors. This effort will help tip the balance of understanding to those who want to play in muniland.