Pacific Investment Management Co., Rydex Investments and ProFunds Advisors are among the buy-side firms touting the benefits of their defensive bond funds in the face of higher interest rates. PIMCO is increasing its holdings in defensive bonds, investing in issues from European governments, said John Brynjolfsson, managing director and portfolio manager. “The logic there is that the U.S. economy is the hottest, and with the weak dollar and the risk of Fed tightening, we’re deleting some [risk],” he said. PIMCO is letting clients know about its defensive strategies on its Web site, as well as through periodic communications.
Rydex is hosting conference calls to to encourage advisors to invest in the firm’s Juno Fund, an inverse bond fund, as well as consider strategies other than selling fixed-income holdings, said Rich Kendrick, marketing director.
Bill Seale, cio and principal at ProFunds, has appeared on cable television in the past month to tout the firm’s 30-year inverse bond strategy. He said assets in the Rising Rates Opportunity strategy are at $1.1 billion, up from $300 million a year ago.