Where do bond funds fit into the FTI System?
U.S. bond funds usually do not, although there are some periods where we do use them. Basically, their trends are usually too flat and short to be useful in this trading system, and their TIs hover around the zero line much of the time causing frequent buying and selling. Emerging market debt (bond funds) and high yield bonds are used, along with one “total bond” fund which essentially takes the place of money market as an “escape” when all of the equity markets are trending down.
