Now leaving ThriventFunds.com

 

You're about to visit a site that is neither owned nor operated by Thrivent Asset Management.

In the interest of protecting your information, we recommend you review the privacy policies at your destination site.

Financial Professional Site Registration

Complete this form to get full access to the entire financial professional site.

By clicking “Register”, you agree to our privacy and security policies and that you are a financial professional.

Access will be granted immediately, but the registration process may take up to 5 business days to complete.

Thank you for registering

You can now enjoy all financial professional content.

If your download does not start automatically, click here.

An error occurred

Please check back later.

Gene Walden
Senior Finance Editor

FUND COMMENTARY

Thrivent Limited Maturity Bond Fund seeks higher yields with lower risk

10/20/2020
By Gene Walden, Senior Finance Editor | 10/20/2020

 


Investors seeking income have had some limited choices in recent years, with bond rates at historically low levels. But for investors in search of income, the Thrivent Limited Maturity Bond Fund (THLIX) may be an intriguing option. (See: Helping your clients with this alternative to money market funds)

Greg Anderson, vice president, fixed income, acknowledges that generally the higher the yield you want, the greater the risk you may need to take. But with THLIX, the objective is to flip the script.  “We want to be able to generate more yield than our peer group with less risk,” he said. “We try to do that in three ways:  sector allocation, duration and yield curve management, and security selection.”

The Fund is diversified across many sectors including securitized, corporate bonds and government bonds. “We’re looking at the areas of the market that offer the most yield for the least amount of risk,” added Anderson.

The Fund focuses on the “securitized” market – pools of loans and receivables typically in the consumer debt and mortgage areas. “Typically, these securities are issued from a bankruptcy remote trust, so unlike a corporate bond, you don’t have the risk of the whole issue defaulting,” he explained. “There may be specific loans within the trust that default, but you have a diversified pool of assets within a trust that mitigates the impact of a single default.”  (While diversification can help reduce market risk, it does not eliminate it. Diversification does not assure a profit or protect against loss in a declining market.)

Because of the uncertainty of the fixed income market,  the Fund managers have tried to take an approach that will work out best for the long term. ”We look for opportunities to increase the duration of the Fund, which typically gives us better yield,” explained Anderson. “If the global economy starts to pick up and get some traction, there is a lot of risk in long-term bonds. I think that the amount of yield you get in the Thrivent Limited Maturity Bond Fund for the amount of interest rate risk is pretty attractive relative to the market as a whole.”




The Fund primarily invests in investment-grade debt securities. The value of the Fund is influenced by factors impacting the overall market, debt securities in particular, and specific issuers. The Fund may incur losses due to investments that do not perform as anticipated by the investment adviser. Bond prices may decline during periods of rising interest rates. Credit risk is the risk that an issuer of a debt security may not pay its debt. The value of mortgage-related and other asset-backed securities will be influenced by the factors affecting the housing market and the assets underlying such securities. Collateralized debt obligations are subject to additional risks. In periods when dealer inventories of bonds are low in relation to market size, there is the potential for decreased liquidity and increased price volatility in the fixed income markets. These and other risks are described in the Fund prospectus.

All information and representations herein are as of 10/20/2020, unless otherwise noted.

The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Thrivent Asset Management, LLC associates. Actual investment decisions made by Thrivent Asset Management, LLC will not necessarily reflect the views expressed. This information should not be considered investment advice or a recommendation of any particular security, strategy or product. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon, and risk tolerance.


Related Reading

November 24, 2020

Opportunities in the high yield bond market

Opportunities in the high yield bond market

Opportunities in the high yield bond market

In a year when bond yields have fallen dramatically after the Federal Reserve (Fed) cut the Fed funds rate to a range of 0 – 0.25% – the lowest rate in U.S. history – high yield bonds still offer some relatively attractive rates for investors.

In a year when bond yields have fallen dramatically after the Federal Reserve (Fed) cut the Fed funds rate to a range of 0 – 0.25% – the lowest rate in U.S. history – high yield bonds still offer some relatively attractive rates for investors.

November 24, 2020

November 24, 2020

Thrivent Multidimensional Income Fund looks beyond bonds for higher yields

Thrivent Multidimensional Income Fund looks beyond bonds for higher yields

Thrivent Multidimensional Income Fund looks beyond bonds for higher yields

In this era of historically low interest rates, the Thrivent Multidimensional Income Fund seeks to bolster returns for income investors through a portfolio comprised of traditional and non-traditional income-producing securities.

In this era of historically low interest rates, the Thrivent Multidimensional Income Fund seeks to bolster returns for income investors through a portfolio comprised of traditional and non-traditional income-producing securities.

November 24, 2020

November 24, 2020

Don’t miss the tax and savings benefits of an IRA

Don’t miss the tax and savings benefits of an IRA

Don’t miss the tax and savings benefits of an IRA

If you’re not funding an IRA (Individual Retirement Account), you may be short-changing yourself both now and in the future. A traditional IRA may help you save money on your taxes today and sock away tax-deferred investment savings for your retirement many years from now.

If you’re not funding an IRA (Individual Retirement Account), you may be short-changing yourself both now and in the future. A traditional IRA may help you save money on your taxes today and sock away tax-deferred investment savings for your retirement many years from now.

November 24, 2020

November 17, 2020

Benefits of Roth IRAs go well beyond retirement

Benefits of Roth IRAs go well beyond retirement

Benefits of Roth IRAs go well beyond retirement

Roth IRAs (Individual Retirement Accounts) are often touted for their tax-advantaged retirement savings benefits, but your Roth IRA can serve as a handy financial resource well beyond retirement savings.

Roth IRAs (Individual Retirement Accounts) are often touted for their tax-advantaged retirement savings benefits, but your Roth IRA can serve as a handy financial resource well beyond retirement savings.

November 17, 2020