Consider Short-Term Bonds
October 5, 2010
The current market environment — characterized by historically low interest rates and money market reform — has created an opportune time to invest in short-term bonds. At RidgeWorth, we believe investors with excess cash reserves earning near zero percent, as well as those invested in long-term bonds who may be most impacted by a rise in rates, will be well served to consider an allocation to short-term bonds.
In our White Paper entitled Time to Invest in Short-Term Bonds?we outline five distinct reasons why now may be an opportune time to invest in short-term bonds. Did you know short-term bonds offer:
- Less downside risk relative to longer term bonds — since 1976 short-term bonds worst one-year performance was -0.2%, while long-term bonds worst one-year performance was -8.6% (see chart below).
- Attractive risk/reward trade-off — the Sharpe Ratio far exceeds that of long-term bonds over all time periods. The higher the Sharpe Ratio, the better the fund’s historical risk-adjusted performance.
- Incremental yield for investors with excess cash — investors with excess cash reserves earning near zero percent can enhance yield by extending their maturities beyond one year.
Download our Featured White Paper and Other Educational Resources to learn why an allocation to short-term bonds should be part of a diversified fixed income portfolio.
Disclosures
This information is educational in nature, provided as general guidance
on the subject covered, and is not intended to be authoritative or to provide tax or investment advice.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value of an investment will fluctuate thus an investor’s shares, when redeemed, may be worth more or less than their original cost.
Mutual fund investing involves risk, including possible loss of principal. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. U.S. Government guarantees apply only to the underlying securities of a portfolio and not a Fund’s shares. Mortgage-backed investments involve risk of loss due to prepayments and, like any bond, due to default. Because of the sensitivity of mortgage-related securities to changes in interest rates, a portfolio’s performance may be more volatile than if it did not hold these securities.
An investor should consider the fund's investment objectives, risks,and charges and expenses carefully before investing or sending money. This and other important information about the RidgeWorth Funds can be found in the fund's prospectus. To obtain a prospectus, please call 1-888-784-3863 or visit www.ridgeworth.com. Please read the prospectus carefully before investing.
® 2010 RidgeWorth Funds. RidgeWorth Funds are distributed by RidgeWorth Distributors LLC. RidgeWorth Investments is the trade name for RidgeWorth Capital Management, Inc., the adviser to the RidgeWorth Funds, and is not affiliated with the distributor. RidgeWorth Funds are available to U.S. investors only and may not be available in all states.
Not FDIC Insured | No Bank Guarantee | May Lose Value
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