The list of funds who tumbled in May and have continued to under-perform in June is getting longer by the day. Credit focused funds, especially those who trade mortgage backed securities, experienced a time of high performance as the Federal Reserve took up a $85 billion/month bond purchase program out of which $40 billion was dedicated to MBS purchases only. As the Fed continues to drop heavy hints that it will wind down the easing program as soon as the labor market improves, funds focused on such securities are in for a tough ride.
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