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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
|
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)
|
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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Fixed Income ETFs: Medium Risk Is Leading The Charge |
Seeking Alpha - Oct. 10, 2011 - By Erik Gholtoghlan
Face it-- there is a new norm. The days of two year rallies and 13% yields are over, and investors cannot rely on equities having short term rallies. So what should they do? They should find investments which not only have high cash flows, but significantly less principal risk than the average investor. Of late, investors have felt that high grade corporate bonds have fit that order best.
Market risk premiums and interest rate spreads have evolved significantly over the past two years, and at this time, partly due to the Federal Reserve's actions, nobody can really clean up using leveraged investments. In fact, we have reached an interesting juncture at which it seems that unleveraged investments outperform leveraged investments. This is what I would call an inverse Sharpe Ratio environment. This means that typical leveraged loans and other high Sharpe Ratio investments cannot match the overall performance of safer investments such as high grade corporate bonds.
We have a situation now in which high yield corporates are yielding less than they were before this latest market downdraft, yet they are yielding significantly more than the safer high grade corporate bonds. In other words, the high risk premium is higher in a relative sense but lower in an absolute sense. But the kicker is -- it seems the market is extremely hungry for that last bit of high yield premium, which means a rally could be lurking.
I'm referring specifically to the performance and behavior of the fixed income ETFs. These include HYG, JNK, LQD, TLT, and many others. High yield has tumbled, while High grade corporates have been as cool as a cucumber over the past three months. This has been all going on while treasury bond funds like TLT have boomed with shrinking yields. Consequently, this means high grade credit spreads have grown, while high yield spreads seem to have come down very slightly.
Given this new norm in the credit markets, what should people invest in? Normally people might think that high grade corporates would be the perfect weapon at this time, because after all, something is better than nothing, or even a negative return. This situation is true at the time of writing, but it will not last forever. We are just now starting to see positive job number news impacting the fixed income markets like rockets hitting a mountain. The mountain will fall, the only question is when.
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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