Video: Hedge Fund Strategies Meet Bond Mutual Funds

Some people say unconstrained bond funds are “the next big thing” for bonds, according to CNBC’s Tyler Mathisan. In this segment, Mr. Mathisan interviews CNBC markets report Dominic Chu, who explains that unconstrained bond funds are “kind of a hedge fund strategy for bond mutual funds.” Unconstrained bond fund managers are allowed to buy any type of bond or derivative, “maybe even a currency,” according to Mr. Chu. With no benchmark constraints, these funds are able to be “agile” and tap into different markets when opportunities arise. Chu says unconstrained bond funds could be poised for asset growth because investors are looking for other ways to play the bond market as they wait for the Federal Reserve to raise interest rates.

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