A bond fund can maintain a 2-3 year average maturity by buying new 5-year bonds with mature bond proceeds. Why would such a fund churn for no gain?The bond fund is not. It is constantly churning bonds to maintain the constant maturity. As such, it's kind of a bet on interest rates at that maturity term falling or remaining the same. Because if rates go up, you get hosed.
Statistics: Posted by bh1 — Mon Apr 01, 2024 12:44 am — Replies 23 — Views 1625