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December 01, 2005 at 02:00 AM
As the Federal Reserve commits to raising interest rates, the environment for bonds will likely become bleak after nearly a half decade of low rates and strong gains.
Still, intermediate bonds (i.e., fixed-income securities that typically mature between three and ten years) have delivered generally good returns, as their sensitivity to interest rate risks is between short- and long-term bonds.
One of the best performers amongst intermediate bond funds, the $414.5-million Delaware Corporate Bond Fund (DGCIX), typically invests in corporate bonds rated BBB and above by Standard & Poor’s.
As of October 31, portfolio manager Ryan K. Brist kept an average credit quality of A, (with BBB-rated securities accounting for the largest portion of assets, at 34.1%), an average effective maturity of 9.7 years, an average coupon of 6.17%, and an average effective duration of 5.8 years.
