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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
|
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)
|
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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Bond yields outweigh risks, say wealth managers |
Investments - Oct. 7, 2011 - By Alice Ross
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/2/a820317c-ef7b-11e0-941e-00144feab49a.html#ixzz1aONg808p
Wealth managers are starting to buy investment grade corporate bonds again in the belief that their yields are fully compensating investors for the risks involved.
High-quality bonds from companies with cash on their balance sheets are now yielding significantly more than government bonds, which have seen their prices rise – and yields fall – as investors have sought safe havens in the recent market volatility. The decision by the Bank of England this week to introduce a fresh round of quantitative easing is expected to put further downward pressure on gilt yields.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/2/a820317c-ef7b-11e0-941e-00144feab49a.html#ixzz1aONitprd
Some portfolio managers argue that it is now a good time to buy corporate bonds, with debt issued by defensive companies – such as GlaxoSmithKline, National Grid and Vodafone – yielding more than 4 per cent. Spreads – the difference between yields on corporate and government debt – are now 150-200 basis points, as many government bonds yield less than 2 per cent.
David Coombs, head of multi-asset investments at Rathbones, says he is buying corporate bonds for the first time in a year, having sold off all his exposure by August. He is now looking to build his portfolio’s bond allocation back up to 20 per cent, by moving out of cash, in the belief that yields are more than compensating investors for the risks involved.
He believes conditions in the bond market are now similar to those of 2008/2009, when private investors flooded into investment grade debt, believing the market was pricing in too much risk of default.
“What typically happens in a bear market is that the implied default rate is almost always higher than the realised rate,” he explains. “If we go into a 1929-style depression, all bets are off. But I think that’s unlikely – I think we’re going into a shallow recession and some of these companies have reasonable cash flow and will get through it.”
For the complete article.
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Income Security Recommendation January 2013 Issue.
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