CRXP provides actively managed exposure to the entire U.S. bond universe plus selective non-dollar and high-yield positions. The 'plus' means the fund can venture beyond traditional investment-grade corporates and Treasuries to capture extra yield from mortgage securities, emerging market debt, and below-investment-grade bonds.
How It Works
The fund employs a flexible mandate that allows managers to shift between government bonds, investment-grade corporates, high-yield debt, and non-U.S. bonds based on relative value opportunities. Duration management is active, typically ranging from 3-7 years depending on rate outlook. The portfolio maintains a core of high-quality bonds while using the 'plus' sleeve (up to 35% of assets) for yield enhancement through selective credit risk and currency exposure.
Key Features
- Active duration and sector rotation unlike passive aggregate bond funds
- Can hold up to 35% in high-yield and non-dollar bonds for yield pickup
- Lower cost than most actively managed bond mutual funds with similar flexibility
Risks
- High-yield allocation could lose 15-20% in credit stress periods versus 3-5% for investment grade
- Non-dollar bond exposure adds currency risk that could swing returns by 5-10% annually
- Active duration bets can underperform if managers misread Fed policy direction
Who Should Own This
Best suited for investors seeking higher income than core bond funds without going full high-yield. Works as a bond allocation for moderate risk portfolios or as a complement to a Treasury-heavy defensive sleeve. The active management and flexible mandate make it appropriate for those uncomfortable picking between duration and credit risk themselves.