Trump Loves Junk Bonds

Stocks, not so much. As for Hillary Clinton, she has a big stake in a stock index fund. Both like cash.

- Steven T. Goldberg

WHEN IT COMES TO INVESTING in the capital markets, Donald Trump takes big risks with bonds. With stocks, not so much. Regardless, his investments could use some work.

Wading through Trump’s 104-page financial-disclosure report, I found a surprisingly scattershot approach to his investments in stocks, mutual funds, exchange-traded funds and hedge funds, worth about $115 million in all. (All presidential candidates must file annual financial-disclosure reports with the Federal Election Commission.)

Trump, who says he’s worth more than $10 billion, owes the lion’s share of his fortune to real estate, licensing of his Trump brand and other private ventures. His disclosure report lists more than 550 ventures, ranging from hotels to an ice-skating rink.

But 20 pages of the report are devoted to investments in hedge funds, as well as ordinary stocks, bonds, mutual funds and ETFs. The report requires candidates to list the value of their holdings in broad ranges— from $1,001 to $10,000, for example. In each case, I’ve used the midpoint of the range to estimate how much Trump has in a particular investment. For instance, Trump reports owning shares of TJX Cos. worth between $50,001 and $100,000, so I’ve valued his holding of the apparel retailer at $75,000.

Trump is a big fan of hedge funds—lightly regulated investment pools that give their managers a lot of leeway—holding about $58.5 million in eight funds. He has a special fondness for hedge funds that invest in risky corners of the bond market, including junk bonds and distressed debt (debt of companies near or currently going through bankruptcy).