U.S. Treasuries: Infinite Supply = Infinite Prices?
Jeff Nielson: It is said that “no publicity is bad publicity”. If this cliché is indeed true, then I should be heartened by the fact that my recent commentary Read more…
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Posts Tagged ‘treasury’
Friday’s ETF Chart To Watch: Barclays 20 Year Treasury Bond Fund (TLT)
Stoyan Bojinov: Stocks crept lower yesterday as disappointing ISM non-manufacturing data results put a lid on domestic recovery hopes; the figure came in at 52.1, falling short of the 52.9 analyst estimate as well as last month’s reading of 53.7. In international news, Read more…
Nowhere To Hide? Consider “Semi-Safe” Havens (IXP, HDV, LQD, DVYE, MUB)
Russ Koesterich: Many investors concerned about a worsening European crisisand a stalling recovery are searching for safe-haven investments. Unfortunately, they are rapidly running out of choices. Read more…
Will Fed Officials Wave Their Magic Monetary Wand Again or Won’t They? Who Cares! (TBT, TLT, IEF)
Mike Larson: In all my years of following the interest rate markets, I can’t recall a moment like this. The so-called “experts” on Wall Street are completely, utterly obsessed with a simple question: “Will Fed officials wave their magic monetary wand again or won’t they?” Read more…
10-Year Treasury Note: Could The 10-Year Really Go Below 1%? (PST, TBT, TLT, IEF, TBF, SHY)
Keith Fitz-Gerald: In the wake of Friday’s disastrous jobs number, 10-year Treasury Note yields finally fell through the 1.5% level, trading as low 1.44% on the day. Read more…
Low QE2 Volume & Inside Day Point To More Downside Ahead In The Markets (TLT, TIP, SLV, SPY, TBT)
Chris Ciovacco: The media likes to imply the Fed is on the verge of cranking up QE3. Here is Reuters take on Wednesday’s Fed statement and press conference: Read more…
Leaders Playing Dangerous Game With Nation’s Debt Rating (TLT, SLV, GLD, SPY)
Chris Ciovacco: Leaders from both parties in Washington are playing a dangerous political game with the nation’s AAA credit rating. The first self-imposed deadline of July 22 to have a framework of a debt-ceiling deal in place has already passed. The second and firmer deadline of August 2 is a Read more…
Low Volume From The Holiday Should Push These Key Market ETFs Higher
“Dow 11,000 is not far away. It is also possible the powers that be, Treasury, Administration, Federal Reserve will want to make headlines in the news, going into a holiday weekend by slamming Read more…
Investors Are Able To Fight The Fear Of Inflation With ETF’s
“THE FEDERAL RESERVE’S POLICY MAKERS MEET this week to discuss monetary matters. Few observers expect a change in the central bank’s zero-percent interest rate, despite growing evidence that an economic recovery Read more…
Buy Inflation Insurance With These ETF’s (TIP, IPE, UDN, WIP)
“Long-term inflation is a given. In the short term, the question is severity. Luckily, there are a few ways for investors to protect their portfolios from its cold hand. Read more…
Inflation Protection ETF’s Are Exploding (TIP)
“Matt Tucker, head of U.S. fixed-income investment strategy at iShares said assets and trading volume in the high-yield ETF have “exploded” in the past year. It currently holds nearly $4 billion Read more…
Pimco To Make Splash In ETF Business
In a move that could shake up the clubby exchange-traded fund business, bond giant Pacific Investment Management Co. is poised to launch its first ETF early next week. Read more…
The ETF Reflation Trade Portfolio
We had technological difficulties in Maine, however, and couldn’t get the satellite hookup going in time.
Even so, I thought it might be interesting to share the portfolio we were going to discuss. It brings up both an important as well as an interesting topic.
According to Wikipedia, “Reflation is the act of stimulating the economy by increasing the money supply or by reducing taxes. It is the opposite of disinflation. It can refer to an economic policy whereby a government uses fiscal or monetary stimulus in order to expand a country’s output.”
Reflation is not necessarily good or bad, of course. The response from the Fed, the Treasury and Congress over the past few quarters probably saved us from a more crushing recession/potential depression. Read more…
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Getting More Income From Your ETF Bond Investments
These are trying times for income oriented investors. Interest rates are still stuck at record low levels which means lower income generated from bonds and other fixed income investments.
U.S. Treasuries with a 10-year maturity are yielding just 3.20%, which isn’t much over the lifetime of the investment, especially after deducting the cost of taxes and any potential for re-inflation. The interest rates being paid by bank certificates of deposit (CDs) is also down. According to BankRate.com, today’s national average 1-year rate for bank CDs is just 2.20%.What can bond investors do?
Bonds, like stocks, come in many different varieties. Government bonds are issued by U.S. or foreign governments, municipal bonds are issued by cities, states and local governments, corporate bonds are issued by companies and there are also asset-backed securities, mortgage backed securities and convertible bonds along with Treasury Inflation Protected Securities (TIPS). Diversifying your bond portfolio is one strategy to gain more income and to reduce market risk.
Let’s briefly evaluate 5 bond ETFs that can help you to generate more income from your bond investments.
iShares Barclays Aggregate Bond Index Fund (NYSEArca: AGG)
The performance and yield of AGG are linked to the widely followed Barclays U.S. Aggregate Bond Index. The index measures the U.S. investment grade bond market, which includes investment grade U.S. Government bonds, investment grade corporate bonds, mortgage pass-through securities and asset-backed securities. With almost $10 billion in assets, AGG is the largest bond ETF and it carries a yield in the vicinity of 4.5%. Year-to-date, AGG has declined 2.09%*. In 2008, AGG gained 5.88% and the fund’s annual expense ratio is 0.24%.
iShares iBoxx $ High Yield Corporate Bond Fund (NYSEArca: HYG)
HYG is benchmarked to the iBoxx $ Liquid High Yield Index, which is designed to provide a balanced representation of the U.S. dollar-denominated high yield corporate bond market through some of the most liquid high yield corporate bonds available. The number of bond issues within HYG is typically 50, although this may change from time to time. The fund has close to $2.13 billion in assets and carries a juicy yield of 11.56%. Year-to-date, HYG has increased by 5.35%. In 2008, HYG fallen 23.86% and the fund’s annual expense ratio is 0.50%.
Full Story: http://www.etfguide.com/commentary/544/Getting-More-Income-from-Your-Bond-Investments/
Bond ETFs Benefit From Narrow Focus
Stock exchange-traded funds have been lambasted for slicing the market too narrowly. But with bonds, more precision is what financial advisers need.
Investors turned to fixed-income holdings last year to offset plunging stock values. But while Treasurys held up, municipal and corporate bonds cratered alongside stocks.
This exposed a problem with many basic fixed-income mutual funds: These are often designed as catch-alls, holding all kinds of bonds and making it difficult for investors to gauge risk.
In fund researcher Morningstar Inc.’s “intermediate term” bond fund category, for instance, the 10 best performers had, on average, almost 40% of their holdings in Treasurys and returned about 8.6% in 2008. The 10 worst performers in same category, with only about 6% in Treasury holdings, were down about 30% on average.
ETF firms are aiming to capitalize on that kind of discrepancy, hoping financial advisers are ready to replace all-purpose bond funds they previously bought for clients with a mix of several narrow-focus bond ETFs, an approach that may allow them to calibrate risks more carefully.
“With iShares ETFs, there are no investment-style surprises,” says Christine Hudacko, a spokeswoman for Barclays PLC’s (BCS) recently sold iShares unit. “No one needs more surprises now.”
Investors seem to be responding to the ETF companies’ pitch, having poured about $23 billion into bond ETFs in 2008 and another $10.9 billion in the first quarter of 2009, according to a recent report by Morgan Stanley.
Full Story: http://online.wsj.com/article/BT-CO-20090423-715420.html
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