Conventional wisdom says that short-term bond funds are a smart fixed-income choice in rising-interest-rate environments. Interest rates and bond prices generally move in the opposite direction, and longer maturities typically have steeper price declines than shorter ones.
In other words, short-term bond funds have lower interest-rate sensitivity than those with longer average maturities or duration.
Also, the Federal Reserve just officially announced the end of its bond buying program. Although the Fed reiterated its plan to maintain its benchmark short-term rate near zero “for a considerable time” and most economists predict it won’t raise that rate before mid-2015, the best time to make investment moves accordingly may be now.
If you haven’t already begun rotating out of long- and intermediate-term bond funds and into short-term bond funds, now is as good of a time as any in the past two years to make your move.
A bond fund is a collective investment scheme that invests in bonds and other debt securities. Bond funds typically pay periodic dividends that include interest payments on the fund's underlying securities plus periodic realized capital appreciation. Bond funds typically pay higher dividends than CDs and money market accounts. Most bond funds...
Saturna Investment Trust, headquartered in Bellingham, WA is a business trust administering six open-end management companies (mutual funds): Sextant Growth Fund (SSGFX), Sextant International Fund (SSIFX), Sextant Core Fund (SCORX), Sextant Short-Term Bond Fund (STBFX), Sextant Bond Income Fund (SBIFX) and the Idaho Tax-Exempt Fund...