‘Core Plus’ Is No Replacement For Core Bonds

Investing in core bonds (Treasuries and other high grade bonds, spread across different maturities) is a standard part of most retirement plans, but the same financial pressures and low yields that are pushing pension plans further out on the risk curve have convinced many people to invest in so-called Core Plus products instead. The problem is that Core Plus products usually behave more like risky high yield bonds and equities than true core bonds.

“It has become increasingly important to be able to distinguish true core bond funds from noncore and core-plus strategies that may invest in securities with different volatility and diversification characteristics than an investor intends to take on,” the Wells Fargo Advantage Funds Fixed Income...