Risks Hidden in “Unconstrained” Bond Funds

Posted on June 27th, 2014 at 9:00 PM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Historically low interest rates in traditional bonds and bond funds are causing investors to look elsewhere. One candidate is the “unconstrained” bond fund.

But there are risks. For example, unconstrained funds invest not just in government issues but also in the other parts of the market that don’t have many issues.

Another risk relates to derivatives. Derivatives are an important part of unconstrained funds. Given the leverage positions of derivatives, incorrect use of derivatives could result in significant loss.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

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