The yield curve will remain steep through the end of 2014 as Federal Reserve Chair Janet Yellen continues her dovish monetary policy, said Robert Galusza, portfolio manager for the Fidelity Limited Term Bond Fund. Galusza said he enhances the returns in his fund through active strategies like rolldown and spread change capture. He added that he likes the financial sector in the corporate bond space because of its improving fundamentals, especially the increased regulation in the industry. Finally, Galusza said the outflows from high yield funds only offer a minimal threat to investment grade issues because of strength in the economy as well as corporate balance sheets.
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