Insights & News

January 2013
Investment Outlook

In a Low-Yield World, Money Funds Lose Luster

Mike Martin, FAI’s Chief Investment Officer, is interviewed by the Wall Street Journal. Poor returns and looming rules spur interest in alternatives. Mr. Martin prefers to use short-term bond funds as a cash alternative over low-yielding money funds.

Mr. Martin says he has placed clients in the $5 billion FPA New Income Fund, which has generated a return of 2.2% in the past year and has an expense ratio of 0.57%, or $57 for every $10,000 invested. While the fund lagged behind its benchmark, the Barclays U.S. Aggregate Bond index, by about two percentage points in 2012, Mr. Martin is attracted to the fund’s short maturity and its credit quality, which Morningstar ranks highly.

To read the full article, please click here.

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