Bond Funds to invest for 2024 (junk bonds, calls, credit rating, Fidelity)

[spalam01]

Considering the current and anticipated interest rate and economic scenario, please advise 1 or 2 anticipated
best performing bond funds for 2024 that I can invest in.

By best performing bond fund, I mean the bond fund that can preserve the capital and give the best possible return in 2024, hopefully better than money market funds.

Currently money market funds provide 5% return... I am not sure what would be their return if the Fed reduces interest rates in 2024.

[sitonmywhat]

I'm doing very well with TUHYX. It's "junk." Yield = 7.59%. When rates come down, share price will rise, while the yield falls back a little closer to earth. Want something safer? DODIX. Current yield is 3.75%. It's a "core+" fund.

[mathjak107]

no such thing as best performance or best ability to preserve capital .

they are opposite .

for the past year or two my favorite has been fidelity floating rate high yield for performance.

i like fidelity intermediate term bond and fidelity short term bond for a mix of yield and preservation of capital if rates should go up and not down

duration is about 3 years so relatively not interest rate sensitive .

all out performance would be TLT if long term rates fall but it will suck for capital preservation if they rise.

personally i wouldn’t take on high yield now other then the extremely short term rate insensitive fidelity floating rate high yield which are very very short term loans

high yield will give best resturns but they will suck if rates are coming down because we are looking like a recession is looming . they are more like stocks then bonds and will take a nasty hit .

so high yield has not only interest rate risk but credit risk too so there are two layers of risk

so choose wisely but no such thing as best performance and best ability to preserve capital ..,they are opposite requests .

it is all a question of which is most important to you and which way you want to orient more

also be aware that many bond funds like dodix are loaded with a sector of bonds that is the more risky then junk bonds .

that is the BBB rating which in dodix is 25% of the whole fund .

BBB is the last rung of investment grade .

one slip in credit rating and BBB can not be held by any fund , institution or pension fund requiring investment grade bonds .

moodys calls it the equal to the 2008 time bomb ..all these bonds that get a one rung drop in rating will have to be dumped with few takers .

if the smell of a recession hits and credit ratings drop 70% of the non govt bond market is in that segment today , that’s is 10x 2008 levels .

so any bond fund loaded with BBB can not be considered if capital preservation is a priority.

so now you see why there is no such thing as what you ask. i am not saying any of these are bad funds but i am saying there is no one size fits all bond fund that can give best performance and lowest risk


i never recommend one bond fund for that reason . i use a few different types and weight the dollars from most to least important to me that i put in

[GWoodle]

Originally Posted by spalam01

Considering the current and anticipated interest rate and economic scenario, please advise 1 or 2 anticipated
best performing bond funds for 2024 that I can invest in.

By best performing bond fund, I mean the bond fund that can preserve the capital and give the best possible return in 2024, hopefully better than money market funds.

Currently money market funds provide 5% return... I am not sure what would be their return if the Fed reduces interest rates in 2024.

For "best performing bond fund" you have to predict what the Fed will do with interest rates. Maybe they are done raising rates. So any guess to how long rates stay as high as they are.

Money market rates may have peaked at 5%. How quick they drop would be good question. Probably the only fund that can preserve capital.

So maybe choose between intermediate & longer term bonds to "lock in" the higher rates for this cycle.

So what you end up with is maybe 3 funds with money market, short, intermediate, long term bonds. Don't know of any total bond index fund that fits this description.

[mathjak107]

total bond is intermediate term at 6-7 years duration on most