http://www.investmentnews.com:80/apps/pbcs.dll/article?AID=/20080331/REG/992532555/1009/TOCThe Charles Schwab Corp.'s largest bond fund has lost more than 80% of its assets over the past 10 months as investors have fled the mortgage-backed securities in which it invested heavily.
Assets in the HighYield Plus Select Fund (SWYSX) had declined to $2.5 billion as of March 20, down from $4.5 billion as of Feb. 29, and from $13 billion in May. The fund invests in bonds with a maturity of less than two years.
As of Feb. 29, more than half its assets were in mortgage-backed securities.
"That fund is in so much trouble," said Matthew Wright, an adviser at Wade Financial Group Inc. of Minneapolis, which manages $160 million. "Anyone left in there needs to get out."
The redemptions are forcing portfolio managers at the San Francisco-based brokerage giant to sell assets at a loss to raise cash for investors looking to bail out, according to financial advisers and press reports.
and good lord, pity the poor client who this person advises:Although Schwab continues to hold occasional conference calls with advisers about HighYield Plus, some still don't understand the situation the fund is in, Mr. Wright said
On the last call early this month, one adviser asked if HighYield Plus was a good place to put his clients' short-term cash, Mr. Wright said.
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