And while there are still good buys in the corporate area, they are harder to find than they were a few months ago.
Because the fund has less in Treasury securities than its benchmark, its performance suffered last year when investors' risk aversion peaked. That underweighting, however, has helped the fund in 2009 as investors have inched back into beaten down corporate and mortgage bonds. With the Treasury issuing more securities and the budget deficit widening, there is a danger that an oversupply of bonds could drive down prices and raise yields. At the same time, the higher yields on Treasurys now available are making them more attractive than riskier securities than they were just a few months ago. With yield spreads narrowing, Swanson says he's now looking at upping the fund's stake in that ultra-safe corner of the bond market.
