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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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Create Your Own Bond Portfolio Using ETFs |
Seeking Alpha - Dec. 13, 2010 - By Timothy Strauts
We often encounter investors who own as many as eight different funds to cover their equity exposure but only one or two bond funds for their fixed-income exposure. Conventional asset allocation theory dictates that investors should have at least 30% of their portfolio in bonds. We find it perplexing that investors don't show the same level of attention and differentiation to the fixed-income portion of their portfolio as they do their equity stakes. This disproportionate tilt toward completely passive investing in fixed income could be the result of less familiarity to the composition of the Barclays U.S. Aggregate Bond Index, which is the most widely followed U.S. bond index. The two largest ETFs that track this index are iShares Barclays Aggregate Bond (AGG) and Vanguard Total Bond Market (BND). Many investors buy these funds for their entire bond allocation because both offerings offer a simple way to get access to the U.S. bond market in a low-cost package.
There is nothing wrong with simplicity; in fact, the benefits can be immeasurable. However, the current composition of the Barclays U.S. Aggregate Bond Index may surprise some investors. This index replicates the U.S. investment-grade-bond market based on market weight, so bond types with the most issuance have the highest weight in the index. The current index consists of 44% U.S. government securities (Treasury/agency), 30% mortgage securities, 19% corporate securities, and 7% foreign securities. The index has been a great choice for investors over the past 10 years, as it has returned 6.04% per year. The main reason for this performance is a period of declining interest rates. In the last decade, the 10-year Treasury yield has gone from 6.02% in July 2000 to 2.96% today. Investors need to consider that, at some point, yields can't go lower, and will start to rise. When this will happen is unknown, but you can start to prepare your portfolio today.
For the complete article.
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| Stuff to look at |
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S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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