Bonds Remain The Simple Way To Diversify
October 1, 2006
In recent years, investors have ventured far afield, throwing things like real estate and hedge funds into their portfolios in an effort to diversify their stock-market holdings. Yet, if you own stocks, there's a much simpler way to reduce risk: Just purchase a few bonds or bond funds.
The fact is, bonds have been a great diversifier during the current decade, and there's a decent chance that will continue.
Marching Together
Investors with a moderate appetite for risk often opt for a 60% stock/40% bond mix. But, truth be told, this classic "balanced" portfolio hasn't lived up to its low-risk reputation -- until recently.
Consider some data from Ibbotson Associates, a unit of Chicago investment researchers Morningstar. In the late 1950s, there was a negative correlation between stocks and bonds, meaning that when one rose, the other often fell.
But the correlation turned positive in the 1960s, as stocks and bonds increasingly moved in lockstep. And the relationship only got stronger from there. By the 1990s, there seemed scant reason for stock-market investors to own bonds, because bonds appeared to offer so little diversification.
To understand how we got to that point, think about the economic environment. Inflation surged during the 1960s and 1970s, driving interest rates higher.
That long rise in rates hurt bond prices, which move in the opposite direction from yields. At the same time, the new higher bond yields were a drag on stocks, which now seemed less appealing.
All this went into reverse in the 1980s and 1990s. Falling interest rates drove up bond prices, while also spurring interest in stocks, as investors sought alternatives to low-yielding bonds.
"I really feel that that mountain, where we got a big rise in interest rates and then a big decline in interest rates, is a nonrecurring event," says New York economic consultant Peter Bernstein. "The whole fixed-income environment is likely to be more like the distant past, before the late 1950s. If interest rates are going to move in a smaller range and without these long trends, then bonds should again be a good diversifier for stocks."
That's certainly been true so far this decade. In fact, the correlation between stocks and bonds has been negative, just as it was in the late 1950s.
Different Strokes
Will this low correlation continue? I suspect so. Somewhat higher inflation may lie ahead, but a combination of government vigilance and global competition should keep consumer prices largely in check.
That means we probably won't see stocks and bonds buffeted by big interest-rate swings. Instead, the normal business cycle will loom much larger.
When the economy is growing briskly, stocks will gain as investors anticipate higher earnings, but bonds will struggle as folks worry that an overheating economy will drive inflation higher. Conversely, when recession threatens, stocks will suffer as investors fear slower earnings growth, but bonds should thrive as inflationary pressures recede.
Sound like good news for the good old balanced portfolio? There is a downside. While bonds may be a better diversifier for stocks in the years ahead, we won't see the huge bond-market gains enjoyed in the 1980s and 1990s, because interest rates are now so much lower.
That shouldn't, however, stop you from buying bonds. "You don't use bonds to maximize return," argues Scott Greenbaum, a financial planner in Harrison, N.Y. "You use bonds to diversify a portfolio."
As Mr. Greenbaum sees it, bonds play two crucial roles. Not only do they lower a stock portfolio's volatility, but also they can be easily sold at any time to generate spending money.
Mixing It Up
Still, all this raises a key question: Given that we won't have the tailwind of falling interest rates, how should you construct the bond side of your balanced portfolio? Nelson Lam, an investment adviser in Lake Oswego, Ore., suggests dividing a bond portfolio so that a third is in U.S. bonds, a third in foreign bonds and a third in inflation-linked securities.
For the U.S. bond portion, Mr. Lam recommends the Vanguard Short-Term Bond Index and Vanguard Short-Term Tax-Exempt mutual funds. The latter fund holds tax-free municipal bonds, which can be a good choice for high-income families investing taxable-account money.
"If we ever get wholesale overseas selling of our bond market, the one bond they won't be selling is munis, because the only people who own munis are U.S. taxable investors," Mr. Lam notes. He also occasionally buys high-yield "junk" bond funds for the U.S. portion of a bond portfolio, but he isn't keen on the sector right now.
Meanwhile, for foreign-bond exposure, Mr. Lam likes American Century International Bond, with a smaller allocation to emerging-market funds such as Pimco Emerging Markets Bond and Pimco Developing Local Markets. The Pimco funds' D shares are available without a sales commission through discount brokers.
"International bonds are the most important element in the bond strategy, because they offer the greatest diversification for a U.S. balanced portfolio," Mr. Lam says. "While emerging-market debt has been on quite a run, its diversification and risk characteristics are fantastic. Over a 10-year horizon, emerging-market debt is a must."
Finally, for the third of a bond portfolio allocated to inflation-linked securities, Mr. Lam suggests an inflation-indexed bond fund or a commodity fund. You can get both with Pimco CommodityRealReturn Strategy, a fund that owns a mix of inflation-indexed bonds and commodity derivatives.
If you follow Mr. Lam's advice, you could end up owning a fistful of bond funds. That is reasonable if you have a large portfolio. But folks with less money to invest might buy a single fund that spreads its assets across a host of bond-market sectors.
On that score, check out funds like Fidelity Strategic Income, Loomis Sayles Bond and T. Rowe Price Spectrum Income. These funds don't replicate Mr. Lam's target mix. But they include many of the sectors he recommends.
买入债券值得推荐
近几年来，广大投资者尝试了各种五花八门的投资领域，将房地产和对冲基金等纳入到投资组合中，通过多元化策略降低股票投资比例。不过，如果你持有股票，有个更简单的方法来降低风险：只要购买几种债券或债券基金即可。
事实上，近十年来债券分散风险的功能尤为突出，而且这种趋势很可能还会持续下去。
不愿承担较高风险的投资者往往倾向于股票/债券六四开的投资组合。不过说实话，这种经典的“平衡组合”以往的成绩并未体现出其投资风险低的特点，直到最近情况才有所改观。
根据芝加哥投资研究机构晨星公司(Morningstar)旗下Ibbotson Associates的数据，20世纪50年代末，股票和债券之间呈负相关关系，即一方价格上涨时，另一方往往价格下跌。
然而，两者在60年代转为正相关关系。在越来越多的情况下，股票和债券往往同向运动；而且此后这种联系日益明显，截止到90年代，股市投资者似乎根本不需要持有债券，因为债券几乎没有什么分散风险的差异性。
要理解市场为何出现这种偏差，我们来回顾一下以往的经济环境。20世纪六、七十年代时，通货膨胀率飙升，导致利率也水涨船高。
利率的持续上升导致债券价格下跌。同时，更高的债券收益率给股票带来负面效应，使股票市场对投资者的吸引力大大下降。
在八、九十年代，情况恰恰相反。利率下调推动债券价格上涨；而股市也同时人气高涨，因为投资者要寻求低收益债券外的其它投资途径。
“我觉得利率的这种大起大落以后不会再发生了，”纽约的经济顾问彼得?伯恩斯坦(Peter Bernstein)说，“现在整个固定收益投资环境更像50年代末之前的那段时期。如果利率在小范围内波动且长期趋势不明显的话，那么债券应该又能成为分散股票风险的良好投资渠道。
近十年来的情况印证了这种判断，因为期间股票和债券又呈现负相关关系，就像50年代末那样。
那么，这种负相关关系能否持续下去？我相信是的。虽然未来的通货膨胀率可能趋高，但政府调控和全球化竞争将在很大程度上抑制消费品价格上涨。
也就是说，我们不会看到利率大幅波动引起股票和债券价格动荡；相反，通常的经济周期将对其产生更大的影响力。
当经济蓬勃发展时，股票价格将会上涨，因为投资者预期企业利润增加，但债券价格会出现动荡，因为投资者担心经济过热导致通货膨胀率上升。相反，当经济进入衰退期，股价会下跌，因为投资者担心企业利润增幅放缓，而债券会随着通胀压力的降低而升值。
听上去经典的“平衡组合”似乎又能降低投资风险了，但其中也有弊端：虽然债券在未来几年内可以作为一个很好的风险分散渠道，但我们不再能享受到八、九十年代的债券高收益率了，因为现在的利率比以往低了很多。
不过，你不该因此不去投资债券。“债券的作用不是将投资收益最大化，”纽约金融规划师斯考特?格林巴姆(Scott Greenbaum)说，“买入债券是为了将投资组合多元化。”
正如格林巴姆所说，债券有两大重要作用：一是缓和股票投资的波动性，二是在任何时候都能轻易变现。
那么，有一个关键问题需要解答：投资者该如何配比债券投资组合，才能确保利率下跌时不蒙受损失？俄勒冈州的投资顾问尼尔森?兰姆(Nelson Lam)建议将债券组合分为三等份，一份买入美国债券，一份买入海外债券，还有一份买入与通货膨胀相关联的有价证券。
针对美国债券部分，兰姆推荐买入Vanguard短期债券指数基金(Vanguard Short-Term Bond Index)和Vanguard短期免税互助基金(Vanguard Short-Term Tax-Exempt mutual funds)，后者持有的是免税的市政债券，适合高收入家庭投资其应税资金。
“如果海外市场大量抛售美国债券，那受影响最小的就是市政公债，因为其拥有者大多是在美国纳税的投资者。”兰姆说道。他在管理一个债券组合的美国部分时，还不时买入高收益的“垃圾债券”，但他眼下不推荐投资该板块。
针对海外债券部分，兰姆推荐买入美国世纪国际债券(American Century International Bond)，同时少量买入新兴市场的基金，如Pimco新兴市场基金(Pimco Emerging Markets Bond)和Pimco当地市场发展基金(Pimco Developing Local Markets)等。Pimco基金的D股在通过折价经纪人购买时，无需支付销售手续费。
“海外债券是债权组合策略中最关键的部分，因为它为美国类投资组合提供了最大的风险分散功能。”兰姆说，“新兴市场债券充满活力，而且风险分散能力和自身抗风险能力都很不错；以10年投资期来看，新兴市场债券是必须买入的。”
最后是与通胀相关的有价证券。兰姆推荐购买通胀指数债券或期货基金，而买入Pimco CommodityRealReturn Strategy基金就能一箭双雕，因为该基金持有通胀指数债券和期货衍生工具。
如果投资者听从兰姆的建议，那最后将持有几种不同的债券基金。如果你资金充足，这样做无可厚非；但那些资金不很宽裕的投资者可能想买一个单一基金，而同样达到在不同债券板块间持有资产的作用。
在这种情况下，建议投资者考虑Fidelity Strategic Income、Loomis Sayles Bond 和T. Rowe Price Spectrum Income等基金。这些基金持有的债券和兰姆推荐的不尽相同，但也包括了很多其推荐的板块。
Jonathan Clements
