This is the seventh and final in my series of blogs on whether a passive or active approach performs better in the mutual fund space.
Our final article looks at the bond market, asking if there are indexing opportunities in all available bond asset classes. Well, the High Yield bonds space is definitely an interesting screening. Keep in mind I’m using Morningstar Direct as my source of screening, testing and research on return/expense data points.
So how does the U.S. High Yield Bond space fare in the active vs. passive debate? My points of fund screening include the following:
- Morningstar Category = High Yield Bond
- Fixed Income/Style Box (Long) = Medium
- Investment Area = United States of America
- Fund Inception Date = < 12/31/1999 (For a true picture of a 15-year return period comparison, as anything shorter than 10 years, I believe, can easily be misinterpreted.)
- Fund Share Class = Institutional Only
The results of the data search provided a total of 26 mutual funds. My data-points screening below indicates that of those 26 funds, none, not even one, was an Index Fund or an Enhanced Index Fund, leaving all 26 as actively managed funds.
Andy graduated from the University of Alabama-Birmingham with a B.S. degree in Accounting. He is a Registered Investment Advisor Representative of Money Management Services, Inc and holds the designations of CPA (Certified Public Accountant), AIF® (Accredited Investment Fiduciary), CTS™ (Certified Tax Specialist), and WMS (Wealth Management Specialist). As an advisor, Andrew specializes in comprehensive financial planning, estate tax planning, personal taxation planning, retirement income distribution planning, wealth accumulation, personalized portfolio management, and fiduciary investment management services.