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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
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3.00% |
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S&P California Bond Index
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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
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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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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Five Things You Didn’t Know About Your ETFs |
Index Universe - July 27, 2010 - by Matt Hougan
Sometimes, analyzing ETFs is easy. Here's the latest example: Van Eck’s new local currency emerging markets bond ETF is just better than its competitors.
Why? Because it fits my definition of what an ETF should do: Provide reliable, focused exposure to whatever asset class investors think they are buying.
I'm not saying "Best ETF Ever!" or anything. I don’t actually agree with Rob Arnott’s assertion that there could be a “generational buying opportunity” in emerging market bonds [Editor's Note: Rob's view is predicated on renewed global weakness] . To my mind, there’s a good reason that emerging market bonds trade at a discount to developed market bonds. For all their growth and capital reserves, emerging market economies are exposed to tremendous social and political risk. Many also have undiversified, extraction-based economies that could run into trouble if and when commodity prices come down. Witness Russia a few years ago when oil prices fell to $35/barrel: The Russian “miracle” started looking like a curse pretty darn quick.
Still, I can see the argument, and I also see this: Any investor who wants to bet on emerging market bonds ought to do it with Van Eck’s ETF (NYSEArca: EMLC), assuming the fund attracts sufficient liquidity to trade well in the open market.
Area #1: Emerging Markets
Currency returns are a key driver of the diversification benefit that makes investing overseas valuable. Buying dollar-denominated emerging market bonds—as the $1.8 billion iShares JPMorgan USD Emerging Markets Bond (NYSEArca: EMB) and the $700 million PowerShares Emerging Markets Sovereign Debt ETF (NYSEArca: PCY)—is like sky-diving with a bungee cord. If you’re going to take the leap, you ought to do it all the way.
In fact, I think the vast majority of investors in EMB and PCY think they are buying local currency exposure. That’s what we’re used to in stocks, where currency returns are a key driver in funds like the iShares Emerging Markets ETF (NYSEArca: EEM).
But thinking about EMLC got me thinking about other places where investors don’t get the exposure they think they’re getting with ETFs. There are at least a dozen areas where investors get bamboozled. I lay out four more below.
Area #2: Corporate Debt
Do investors in corporate bond ETFs realize they are allocating more of their money to the most heavily indebted companies?
I would say no.
My guess is that the majority of investors in LQD and similar funds think they’re buying bond exposure to large-cap, S&P 500-level companies, weighted, more or less, along the same lines of the S&P 500.
How many investors in the iShares iBOXX $ Investment Grade Corporate Bond Fund (NYSEArca: LQD) realize their top holding is Verizon (NYSE: VZ), not Exxon, Apple or Microsoft?
I would say very few. Modern corporate bond indexes are built in a counterintuitive manner, and investors who don’t take the time to figure this out could be very surprised by the pattern of returns they receive.
Area #3: Crude Oil
We’ve covered this one to death, but I still think many investors in the United States Oil Fund (NYSEArca: USO) think they’re buying exposure to spot oil prices and not to oil futures. As this chart shows, those are two dramatically different things.
For the complete article visit Index Universe
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| Stuff to look at |
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Income Security Recommendation January 2013 Issue.
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