audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I'm not sure what you gain.I meant with different maturity dates, like basically the fund does the laddering for you, but without ever selling any of the existing bonds in the fund, if that makes sense.
I don't have any problem with a fund manager selling a bond early if he thinks he can make a better value investment with the proceeds. Many bond fund managers also add value by "playing the rate curve".
They don't ONLY hold bond funds in a certain maturity range. They hold a wide range of maturities, shaped like a bell curve, which then average out to the target window duration of the fund. Look at the composition of a bond fund and you'll see this. They don't actually "have" to sell a bond to manage the fund maturity. They can choose to buy a longer term bond to adjust the average duration. It all depends on where they perceive the better value to be.
They sell bonds if they think it is more valuable appreciation-wise to sell them early rather than wait for maturity, compared to the bonds they can buy with the proceeds.
Honestly, I think if there were a major benefit such a product would have been available already.
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