Unsurprisingly, actively managed funds are beginning to see the light of day again with the renaissance of bonds.
Because the passively managed exchange-traded index funds (ETF) are not necessarily the first choice for bonds and the indices geared to them, even if their fees are significantly cheaper than those of active funds.
This is because the bond indices are weighted according to market capitalization, similar to the stock indices.
What stands for corporate strength in the stock market tends to be the opposite in the bond market.
Because the weight of the issuers is based on the debt securities in circulation.
This means that issuers with large amounts of debt can have a large weight in the bond indices.
This creates cluster risks for investors in bond ETF products that an active fund manager can avoid.
Even if the bonds of individual companies are now paying attractive interest rates again and are appealing to private investors with low minimum investment volumes, the broad risk diversification of a fund is preferable to the risk of a single issuer.