This fund holds mainly various short- and intermediate-term bonds
, often backed by insurance company guarantees.
Normally, the fund invests at least 80% of its net assets in bonds and 65% of its total assets in short- and intermediate-term bonds
Many advisers generally recommend short- to intermediate-term bonds
or bond funds so the portfolio doesn't sustain too much damage if interest rates rise.
According to a study by Ibbotson Associates, an investor starting in 1972 to withdraw at a rate of 9% a year from a portfolio of 60% large-company stocks and 40% intermediate-term bonds
would have gone broke in 1981.
Remember the basic rule of thumb: if you are going to need the money in the short term (to pay upcoming college tuition, for example), consider investments such as short-term Treasuries, intermediate-term bonds
and cash equivalents like CDs and money market accounts.
The Tedfords' fixed income performance tract record in intermediate-term bonds
-- those maturing in one to 10 years -- was ranked third in the Piper Domestic Intermediate Duration Managed Fixed Income performance evaluation report over the past five years.
For those who are getting ready to retire in a few years, he said a classic allocation is to put 65 percent of your money in stocks, 25 percent in short- to intermediate-term bonds
and the rest in money market funds.
These debt obligations are offered by the same institutions that offer intermediate-term bonds
but have more than 10 years until maturity.
Also look for pre-funded municipals, short- to intermediate-term bonds
backed by Treasury securities.
Availability of additional investment choices representing large-cap equities, small-cap equities, government bonds, intermediate-term bonds
, and short-term bonds
These funds hold intermediate-term bonds
rather than long-term bonds.
For balanced portfolios, Consulting Group's Asset Allocation Committee recommended a lower allocation to intermediate-term bonds
and greater exposure to large-cap U.