Market Pulse: Fixed-income funds for long-term investors

David Vomund

Many fixed-income funds have fallen sharply ever since Fed Chairman Bernanke talked about “tapering.” The iShares 20+ U.S. Treasury ETF (TLT) has lost 17 percent since May.

My article “U.S. Treasuries — A High Risk Investment” correctly warned investors. Yet many retirees still need income from their investments and many investors don’t want to be too exposed to the stock market.

What should they do? That’s the subject of my recent interview with

In my interview I was asked for my favorite ETFs for income and long-term investing. As Bonanza readers know, I believe income investors must include dividend-paying equities, but I limited my choices to fixed-income ETFs. Here are the two I chose:

• PowerShares Senior Loan Portfolio (BKLN). I wrote about this bank loan fund here in February. Other investment managers also found this fund attractive as it is one of the most popular ETFs in 2013, gathering $3.6 billion in assets. BKLN yields 4.6 percent and provides some protection against rising rates because it invests in floating-rate bonds. Because most of the bonds are not investment grade, the risk to this fund is a slowing economy.

• iShares US Dollar Emerging Market Bond ETF (EMB). Rising interest rates led to selling in most fixed-income funds and for many this selling is deserved. But not in all. I believe the selling in emerging market bond funds is overdone. EMB is the largest emerging market bond fund with $4.1 billion in assets and it primarily holds U.S. dollar denominated government debt, much of it investment grade. It yields 5.3 percent.

To read my entire interview with covering income funds for long-term investors, please visit my blog at, or drop by my office at 889 Alder Ave.

David Vomund is an Incline Village-based fee-only money manager. Information is found at or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.

Support Local Journalism


Support Local Journalism

Readers around Lake Tahoe, Truckee, and beyond make the Sierra Sun's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Your donation will help us continue to cover COVID-19 and our other vital local news.