What is the most common diversification strategy for bond investment for a long term investor?

  • long vs. intermediate vs short term
  • inflation protected (TIPS)
  • US vs world
  • government vs corporate etc.

There is plenty of into on stock allocation, but not that much for bonds.

  • 2
    Your question is pretty vague. The answer depends on risk tolerance, location, taxes, and other factors. A quick Google search turned up this result, as an introduction: schwab.com/resource-center/insights/content/… – 0xFEE1DEAD Mar 11 at 15:31
  • @0xFEE1DEAD That's a really usefull link, with a concrete allocation example I can use as a starting point - exactly what I was looking for. – Danijel Mar 12 at 8:11
  • @0xFEE1DEAD Could you add that as an answer? – Danijel Mar 15 at 8:44

The big-name active bond funds are just active but most likely they are intermediate. But an intermediate bond fund can shorten its duration with hedging.

A closed-end bond fund will likely use more leverage and hedging than an open-end fund but there are some big-name active open-end funds.

  • Well, an active bond fund responds to macro-economic trends and that is its diversification strategy. A diversification formula, on the other hand, would make an index. – S Spring Mar 12 at 2:30

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