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UPDATE 1-Fuss says Loomis Sayles Bond Fund has high exposure to short-term reserves
June 7, 2017 / 7:13 PM / 2 months ago

UPDATE 1-Fuss says Loomis Sayles Bond Fund has high exposure to short-term reserves

1 Min Read

(Adds quotes, background on Fed meeting)

By Jennifer Ablan

NEW YORK, June 7 (Reuters) - Loomis Sayles Vice Chairman Dan Fuss said his popular Loomis Sayles Bond Fund (LSBDX), which has outperformed 92 percent of its peer category over the last 15 years, has amassed one of its highest exposures to short-term reserves, which include U.S. and Canadian government bonds, as the rate-hiking cycle continues.

“I am the most cautious I’ve been in the history of the bond fund,” which was launched in 1991, Fuss said on Wednesday. “I am cautious about interest rates rising,” added Fuss, who is known as the Warren Buffett of bonds.

Investors see a high likelihood of a rate hike when the policy-setting Federal Open Market Committee meets June 13-14.

Fuss said the average maturity holdings of the fund of 6.5 years, down from 13 years, is taking a “very defensive” approach to investing, given the trajectory of higher interest rates. (Reporting by Jennifer Ablan; Editing by Phil Berlowitz and Chizu Nomiyama)

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