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Can somebody explain why a fund that is attempting to capitalize on the typically inverse correlation between bonds and equities would choose to allocate so much of the bond portion of their portfolio to junk bonds? Scared money does not flee to junk bonds, that's when you want the hedge to perform the best. I guess they'd rather have slightly more upside in up markets instead? I assume the people managing these things are a lot smarter than me and they've managed more than 13% cagr since 2007 so they must be.
It just seems unusual to me.
