"FranksPlace2" <FranksPlace2[at]gmail.com> wrote in message
news:1119531513.461992.208640[at]g47g2000cwa.googlegroups.com...
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The only Nuveen taxable closed-end funds I find matching these data are:
- Nuveen Diversified Dividend & Income Fund (JDD - 8.12% current market
yield, 10.25% discount), and
- Nuveen Preferred and Convertible Income Fund 2 (JQC - 8.11% current market
yield, 9.59% discount).
http://www.nuveen.com/etf/products/FundSorter.aspx

The former invests in dividend-paying common stocks, emerging market debt,
and senior securied loans; the latter invests in preferred securities (60%),
convertibles (30%), other debt (10%) - not exactly your typical corporate
bond funds.

Be that as it may, their total returns YTD are and 0.81% and -2.39%
respectively, including their high current yield; and that is in a market
where bond prices have been generally rising or flat. Contrast that with
the average intermediate bond fund (1.86% YTD) or the average long term bond
fund (2.34% YTD).
http://news.morningstar.com/fundRetu...CatPerformance

While I feel that concerns about losing principal in bond funds (vs.
individual bonds) is overblown, I do feel that investing in levered bond
funds is a different matter.

Leveraging is achieved by borrowing at short term rates and lending at long
term rates. This works fine, so long as the money costs less than your
return on it. With a normal yield curve, there is some buffer built in -
the short term rates are substantially below the long term rates, so even if
the fund's cost of money (the short term rates) rise, they are still below
the locked in long term rates that the fund is receiving on its long term
bonds.

That is no longer true with a relatively flat yield curve. A relatively
small bump in interest rates at the short end can wind up costing the fund
money.

"[W]hen interest rates are rising, the fund may have to pay out as much or
even more interest than it is able to earn on its long-term bond
investments."
http://www.pathtoinvesting.org/categ.../bonds_076.htm

With respect to the discount:

"Once interest rates turn up seriously, ... closed-end bond funds trade to
discounts as rates rise and especially as increasing numbers of investors
realize that leverage is accelerating their losses."
http://www.lipperweb.com/usa/researc...e_ce_funds.pdf

All in all, leveraged hybrid (I'm reluctant to call these bond) funds would
not seem appropriate.

The original request appeared to be for "best" corporate bond funds at
Schwab. Schwab Center for Investment Research did a study to identify
factors that correlate well with performance. They came up with risk (both
credit risk and interest rate risk), expenses (1% change in expenses
corresponds to a 70 basis point change in return), and past performance
(yes, past performance, though IMHO that is due to latent factors - risk and
expense - within past performance).
http://www.fpanet.org/journal/articl...p0401-art7.cfm

The bottom line of this study, with which I agree, is that "[w]ithin
maturity and credit-quality categories, investors should focus on funds with
good past risk-adjusted performance and low expenses. Bond fund investors
who believe in their ability to forecast rates and spreads should select
low-cost funds with good track records in their preferred bond fund
categories." Ibid.

That should be clear enough for the original poster to find the "best" funds
at Schwab.
--
Mark Freeland
nBeOwXs[at]pacbell.net

If you want some diversification you might consider a closed end with
leverage. Nuveen offers a taxable fund (suitable for a tax defferred
portfolio) currently with a 10% discount price to NAV yielding 8.1%.

Frank

Elle wrote:

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I think long term it will be a very good investment. I was more
commenting on how bad my timing is. I placed a limit order the night
before they crashed and my order was filled at the open. I could have
bought them a whole lot lower an hour after the open.

They've recovered quite a bit, and with with the interest I've already
collected I'm almost even.

Best regards,
Bob

"zxcvbob" <zxcvbob[at]charter.net> wrote
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It sounds like the original poster is leaning somewhat towards junk bonds
("high return"). If so, the NAV of junk bond funds doesn't track interest
rates the way non-junk bonds do. For example, chart VWEHX (junk) vs. VFICX
(high grade, ave. duration between 4 and 5).

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If the original poster can settle for lower returns (and lower risk), then I
agree with this strategy. S/he should also compare CD rates to high grade
bond rates. CDs may be more attractive.

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Chin up! It ain't over until the fat lady sings (the bond matures!). They
must have a pretty decent yield compared to my CD positions.

markdemers15[at]hotmail.com wrote:
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It might be safer to buy individual bonds than to buy a fund; if you buy
a fund and interest rates go up you will lose probably equity. If you
buy individual bonds, you have the option of holding the bonds to
maturity if the bond market tanks -- you will eventually get all of your
equity back plus the interest unless the company defaults on the loan.
(The default risk is why you will want to diversify your bond holdings
just like you would equities.)

Best regards,
Bob

P.S. I bought a bunch of GMAC bonds a month or two ago, the day before
they tanked. If I'd bought a few days later I'd have a very nice
capital appreciation right now instead of a small loss. So take my
advice with a grain of salt.

I'm tired of equities and want to allocate 20% of my portfolio to
medium to high return
corporate bond fund. I have an
account with Schwab. Can anyone suggest a list of the "best" funds?

Mark Demers
EquityValue Investments
http://groups-beta.google.com/group/equityvalue?hl=en