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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
|
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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An optimal mix for corporate bonds? |
InvestmentNews - Dec. 7, 2010 - By John Radtke
The following is a market commentary by John Radtke, president of Incapital LLC, a securities and investment banking firm based in Chicago, Boca Raton and London.
Advisers meeting with clients on year-end strategies may be discussing a fixed income portfolio which sufficiently diversifies credit risk. A recent study conducted by BondDesk Group makes the case that the number of bonds needed for adequate diversification may be lower than many advisers assume.
The BondDesk study suggests that a high grade fixed income portfolio of 10-15 bonds offers nearly as much credit risk diversification as 40-50 bonds. A major finding of the study is that ‘for an investment-grade portfolio of corporate securities, as few as 10 bonds provide enough diversity to prevent extreme default loss'.1
The default risk associated with investment grade corporate bonds was apparent during the late 2008 and early 2009 credit crisis. As a result, portfolios constructed to avoid a drastic loss are very much on the minds of both investors and advisers.
The methodology of the study utilized Monte Carlo simulation to quantify two values: tail risk and black swan risk. Tail risk measures the probability of incurring a loss of a particular level (i.e. 20%) within an entire portfolio. Black swan risk measures hypothetical portfolio loss during a catastrophic market event. An example of such a loss would be a 50%+ market meltdown, which is assigned a much lower probability.
While no analysis can encompass all the relevant variables, the study calculated the tail risk and black swan risk for 49 distinct portfolios – 2 bonds, 3 bonds, 4 bonds…up to 50 bonds. The combination of the two variables was used to determine which bonds in the portfolio would default and which would survive.
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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