Bond Fund & KLCI Behavior and Relationship

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Some of my clients / potential clients get interested in bond fund as an avenue for investment, especially after some of them were pursued by bankers or fund agents on the good performance of the bond funds at the present time.

This analysis and articles aim to look deeper into the behavior and the relationship of bond fund and the market (in our case KLCI index as market indicator). Althuogh BHL fund data is used, nevertheless, for most of the professionally managed funds, in spite of different companies managing the funds, the general performance is not much of big differences, basically these funds in equity drops or rises in tandem with the market sentiment. Whereas bond fund performance and behavior is different in comparison with the market.

The question is when the bankers and agents strongly promote the bond funds with historical data to show good performance, what should we be cautious about? ......