Vanguard, Pimco Bet on Energy to Boost Blue-Chip Bond Funds (1)

The best performing blue-chip bond funds of the past year — run by Vanguard Group Inc. and Pacific Investment Management Co. — bet big on energy companies and banks. Now, they’re prepping for even more gains in 2024.

The funds’ managers are wagering that fuel producers and exporters stand to gain even as a slowing economy pushes the Federal Reserve toward easier policy. Liquefied natural gas is ripe with opportunity, they say, while oil prices are poised to stay resilient enough to generate cash flow and reward bondholders. They also still like the bank debt they bought last year. ...