Canadian Public Pension Fund Makes 19% on Bond Portion of its Portfolio Yr End March 31, 2009

(c)2009 F. Bruce Abel

A good result that shows the value of diversification by having a fixed income balance. Fifth Third barely broke even on its bond portfolio for the same time period in the trust that I follow, largely, I believe, because it invested in Various Bond Funds which had toxic assets such as Fannie and Freddie preferreds, and perhaps had bad derivatives as well.
http://www.theglobeandmail.com/report-on-business/federal-pension-plan-books-227-loss/article1229050/

You will note that the comments and the gist of the article is that the Canadian pension fund managers did not deserve their large pay because the overall portfolio showed a loss of 22.7%. But I dispute that conclusion, as the bond portion did quite well.

David Swensen -- Listen-Up

David Swensen, Yale's in-house Warren Buffet, answers questions posed by Marc Gunther.


I will be posting a lot on this article by Marc Gunther. So far it is not on the web. So I will "Nuance" it from time to time and post the verbatims. Correction, here it is!

http://www.yalealumnimagazine.com/issues/2009_03/swensen.html


Note that Swensen does not say "bond funds."


The article was written by Marc Gunther '73, a contributing writer to Fortune magazine, who blogs at marcgunther.com

Krugman -- Dithering by the Geithner Team

http://www.nytimes.com/2009/03/06/opinion/06krugman.html?_r=1

Should Funds Be Allowed to Go To Cash?

A good discussion:

http://finance.yahoo.com/news/Should-Funds-Be-Allowed-to-Go-ms-14232731.html

Millionaires Down 30%

http://finance.yahoo.com/news/Millionaires-feel-some-cnnm-13981092.html

Bond Funds

http://www.nytimes.com/2008/12/27/your-money/stocks-and-bonds/27money.html?8dpc

Biting My Tongue

The hardest thing is to bite my "tongue." To the trust officer, I mean. But reviewing the September 30 statements there was no place to hide. Yes, pure treasuries was the place to be, not the semi-toxic bond funds which had some Fannie and Freddie preferreds and the like.

Under one of the last trust officers, who took suggestions, we had an agreement that the bond sector would be in treasuries, but that may have been many years ago. This because I always had a fear of the derivatives, which I traded for two years and saw the immense possibility for destroying the system. But you can't go around saying the sky is falling while the market is stable without being totally snubbed.

Confusing Trust, Not Necessarily Toxic

Toxic Trust