Tags: Loomis Sayles | bond | Dan Fuss | fund

Loomis Sayles' Fuss: 'It's Time to Be Cautious' in Bonds

By    |   Wednesday, 30 July 2014 03:41 PM

Most of the concern about asset values coming from financial circles recently has focused on stocks. But bonds are a worry too, says Dan Fuss, star manager of the Loomis Sayles Bond Fund.

The Barclays 10 to 20-year Treasury index has returned about 9 percent this year, and its Municipal Bond index has gained 6.4 percent.

"I think it is a very good time to be cautious," Fuss told MarketWatch. "You have growing geopolitical risks and you have shrinking incentives to invest."

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While military conflict is raging in the Mideast and Ukraine, European bond yields have dropped to record lows. "I’m looking at the risks around the world, and I’m looking at the direction they are going, and I’m saying 'this is really truly not good,'" he said.

"And then I’m looking at the markets, and I’m saying 'this is truly full valuation.' And so what’s the prudent thing to do? Well the prudent thing to do in the case of the Loomis Sayles Bond Fund is to say, 'okay let’s get that liquid reserve up.'"

Wednesday's stronger-than-expected GDP data sent bond prices reeling. The government reported that the economy grew 4 percent in the second quarter after shrinking 2.1 percent in the prior three-month span.

"It’s given the market a well-deserved selloff," Jason Rogan, managing director of U.S. government trading at Guggenheim Securities, told Bloomberg. "The economy is picking up steam. The Street is looking to reduce exposure.”

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Most of the concern about asset values coming from financial circles recently has focused on stocks. But bonds are a worry too, says Dan Fuss, star manager of the Loomis Sayles Bond Fund.
Loomis Sayles, bond, Dan Fuss, fund
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2014-41-30
Wednesday, 30 July 2014 03:41 PM
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