Bond Funds That Got Flight to Quality Wrong
The worst-rated fixed-income mutual funds were caught on the wrong side of the flight to quality.
Seven of the 25 fixed-income funds with the lowest overall scores from TheStreet.com Ratings' quantitative investment model focus on high-yield debt. They bear the worst possible "reward," "risk" and "overall" grades from the model.
At the bottom is Oppenheimer Champion Income A (OPCHX), a corporate, high-yield fund that has tumbled 79% over the past year.
The Direxion 10-Year Note Bear 2.5X Fund (DXKSX) gained 2.4% in February, but is still down 22% over 12 months. The past year was the wrong time to be short U.S. Treasuries with 250% leverage.TheStreet.com Ratings' quantitative model condenses fund data into a single composite opinion of risk-adjusted performance. There are also "reward" and "risk" grades. While there is no guarantee of future performance, TheStreet.com Ratings' grades provide a solid framework for making informed investment decisions. The grades can be interpreted as follows: A is "excellent" and considered a "buy" recommendation. B is "good" or "buy." C is "fair" or "hold." D is "weak" or "sell." And E is "very weak" or "sell." A plus or minus sign designates that a fund is in the top or bottom third of funds with the same letter grade.
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