What is the difference between core and core plus bonds?

As Morningstar’s director of fixed-income strategies Sarah Bush explains, core bond funds tend to focus on investment-grade U.S. bonds, whereas core-plus bond funds have more latitude to invest in below-investment-grade debt and may also invest in emerging-markets debt and non-U.S.-dollar debt and currencies.

What does Core bond mean?

Core bond fund is the name given to bond funds that act as the centerpiece of your bond fund investments. They are generally well diversified across the US Investment grade bond market which includes US Government, Corporate, Agency and Mortgage related bonds (tax free municipal bond funds are not normally included).

What is core investment strategy?

A core investment strategy is by definition low-risk. In the property markets, core strategies generally encompass the direct ownership of high-quality, fully leased assets located in primary markets that are well diversified economically and that offer significant liquidity.

What is a core fixed income strategy?

The Core Fixed Income Strategy is a value-oriented fixed income strategy that invests primarily in a diversified mix of U.S. dollar-denominated investment-grade fixed income securities, particularly U.S. government, corporate, and securitized assets, including commercial mortgage-backed securities, residential mortgage …

What is the objective of the Core Plus bond strategy?

The investment objective of the Core Plus Bond Strategy is to seek an annual rate of total return greater than the annual rate of total return of the Bloomberg Barclays U.S. Universal Bond Index. The strategy normally invests at least 80% of its net assets in the following types of U.S. dollar-denominated debt obligations:

Which is an example of a core plus investment?

Core Plus Investments. The JPMorgan Core Plus Bond Fund (ONIAX) is one core plus fixed income example. The Fund invests primarily in investment grade bonds. It has the flexibility to tactically invest 35% of the portfolio’s assets in securities outside the central objective that have enhanced return potential.

What are the advantages of a core bond fund?

Pros and Cons of Core Bond Funds. Core bond funds offer investors a single diversified bond fund product with broad exposure to the investment-grade area of the bond market. They provide participation in several market segments, most notably U.S. Treasuries, mortgage-backed securities, and investment-grade corporate bonds.

Can a equity fund use a Core Plus strategy?

Equity funds can also use core plus strategies. Core plus investment strategies are primarily associated with fixed income funds. They give a fund manager some flexibility to enhance returns from investments beyond the core objective of a fund.