Loomis Sayles’ Fuss Increasingly Cautious on Bonds

As political uncertainties “cloud an otherwise solid economic outlook,” Loomis Sayles vice chairman Dan Fuss says he is more cautious on bonds than he has been since the 1970s, says a recent CNBC article. In a Reuters interview from earlier this month, the octogenarian (and one of the world’s longest serving fund managers) says he has cut the average maturity of holdings in the firm’s flagship bond fund to 6 ½ years. Sometimes called “the Warren Buffett of bonds,” Fuss argues that, besides rising political risk, trade factors are cause for concern. “For instance,” he says, “if U.S. policy becomes […]

Dan Fuss, the “Four Ps” and the Bond Market

Dan Fuss, vice-chairman of Loomis Sayles and manager of the Loomis Sales Bond Fund, has been in the fixed-income markets more than half a century. Over the last ten years, his fund has outperformed 92% of its peers, although it’s near the bottom for this year. Fuss says, “In the fixed-income markets, we have to deal with low rates and low inflation,” continuing, “both will rise. That is not a good combination.” More broadly, he analyzes the bond market according to what he call “four Ps” – peace, people, prosperity, and politics – as well as the role of central […]

Top Bond Managers Look for More QE

Three top bond fund manager says that a weakening U.S. economy will lead the Federal Reserve to enact “QE3” — another round of quantitative easing — and they are positioning their portfolios accordingly. “I just don’t think that we have a healthy fundamental foundation for the economy and therefore surprises are likely to be on the negative side,” Jeffrey Gundlach tells Bloomberg, which reports that his fund, which invests in mortgages, had 34% of its money in non-agency residential mortgage-backed securities as of March 31. Bill Gross, meanwhile, says the economy will need more QE, though recent comments from Fed […]