Bond Market Liquidity Crisis a Real Fear Says FPA Manager

Published on Jul 8, 2015
Investors nervous about the Greek crisis, China’s stock market collapse or even the trading halt at the NYSE may want to check out FPA New Income. The $5.7 billion bond fund has never had a losing year since its 1984 debut. One reason for its money-making streak is because it ladders its holdings, said portfolio manager Tom Atteberry. ‘Approximately 30% of the assets are going to amortize or mature between this past March and the end of this year. And then another 25% in 2016, then another 15% in 2017,’ said Atteberry. ‘It has this schedule of amortization with it that as you see these volatility points, whether it’s a Greece or something else, we are having money come back to us that we can then redeploy at what could potentially be a better return opportunity.’ The FPA New Income Fund is unconstrained and seeks to maximize current income and long-term total return. Capital preservation is also a major consideration for the fund, which has returned about 1% year-to-date.