FPA Funds - Buyer’s Strike Revisited

June 16, 2008 marked the five-year anniversary of when we drew our line in the sand by penning “Buyer’s Strike.” Our stance at that time was that “we are on a buyer’s strike in regard to the high-quality segment of the bond market.” We argued, “we consider high-quality bond yields below 4% as having little or no investment merit and, therefore, we will not deploy your capital into them.” We believed that high-quality bonds, with maturities of greater than two-years, had too much price risk.

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Since June of 2003, our buyer’s strike has been questioned many times by clients, shareholders and others, so we thought it was appropriate to look back at what has transpired in the bond market since we took that position.

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