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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
|
2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Retirees: Look Before You Leap Into Preferred Stock
These securities are no substitutes for bonds. |
MORNINGSTAR - Jan. 28, 2011 - by Christine Benz
Times are tough for income-focused investors. First, the bear market did a number on most portfolios, and already-low interest rates have slunk even lower for most of the past few years. Money market yields are almost nonexistent, and intermediate-term bond fund payouts aren't much better. The Barclays Aggregate Bond Index--the benchmark for core funds like Vanguard Total Bond Market Index (VBMFX
) and PIMCO Total Return (PTTRX
)--is currently yielding about 3%. Even bond funds with a greater share of their portfolios in corporate bonds aren't paying out much more than that.
It's no wonder, then, preferred-stock funds and ETFs, some of which have yields substantially higher than what corporate bonds are yielding, have been picking up assets at a good clip. iShares S&P U.S. Preferred Stock Index (PFF
) has more than $6 billion in assets, while PowerShares Financial Preferred (PGF
) and PowerShares Preferred (PGX
) have gathered more than $3 billion combined.
Preferreds may give income-focused investors the yield they seek without having to draw heavily on the principal in their portfolios. But those rich payouts may also provide an illusory sense of security, delivering high yields while eroding principal.
The Basics
Preferred stocks have both stock- and bondlike characteristics. Like bonds, most preferreds make fixed dividend payments. In contrast with bonds, though, many preferreds don't carry maturity dates, and those that do may mature in 30 years or more. That means that when you invest in a preferred, you won't necessarily receive a promise that you're entitled to a certain amount of money back on a certain date. And while a company that issues debt is obligated to pay interest to its bondholders, companies issuing preferred stock--like companies issuing common stock--aren't obligated to make payouts. Instead, it's up to the company's board of directors to determine whether to pay a dividend. (If a company decides to suspend its dividend to preferred stockholders, however, those dividends usually accrue until the company is able to pay dividends again.)
In terms of investor protections, preferreds also fall betwixt and between. If a company were to have difficulty servicing all of its financial obligations, bondholders would get paid first, followed by holders of preferred stock. Common-stock owners would stand last in the pecking order.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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