Learn Bonds: – Understanding bond risk – Part 2. – Most conservative investors focus on the yield of a bond, and get excited when the yield is high compared to other investments. That brings us to the discussion of interest rate risk.
Reuters: – Bankrupt San Bernardino to impair bondholders, not Calpers, in exit plan -city attorney. – Bankrupt San Bernardino will significantly impair its bondholder creditors while paying pension fund Calpers in full in a plan to be presented in May, City Attorney Gary Saenz said on Thursday.
Market Realist: – Why 2014 was a year of recovery for the municipal bond market. – In 2014, the municipal bond market recovered from its stream of bad news. Risk-averse bond investors’ preference tilted towards municipal bonds as the federal funds rate remained at the zero lower bound.
To see a list of high yielding CDs go here.
Bloomberg: – What Draghi’s bond buying in Europe means for U.S. debt markets. – The European Central Bank’s resolve to funnel more than a trillion dollars into the region’s capital markets may be a boon for borrowers across the Atlantic.
Reuters: – U.S. banks resign themselves to lower yields for longer. – U.S. banks, after spending much of the last year bracing themselves for higher bond yields, are now resigning themselves to at least another few quarters of low rates, executives and analysts said.
MarketWatch: – Five reasons bonds will continue to climb. – The bond market is super strong. It’s again hitting new bull-market highs as it surges higher into the new year.
Bloomberg: – Flight to volatility is what you get in flight-to-safety trades. – Investors are piling into U.S. government bonds looking for safety. What they’re getting are securities whose values are fluctuating more than those on junk bonds.
Bloomberg: – Draghi QE seen pushing corporate borrowing costs below 1%. – Corporate borrowing costs are poised to dip below 1 percent for the first time in Europe as Mario Draghi’s 1.1 trillion-euro ($1.3 trillion) bond-purchase program makes it even tougher for investors to find yield.
High Yield Bonds
S&P Capital IQ: – High yield bond funds see $241M investor cash outflow. – Retail cash flow for U.S. high-yield funds has flipped back into negative territory, with a net $241 million outflow during the week ended Jan. 21, with roughly one-third linked to the exchange-traded fund segment, at $82 million, according to Lipper.
Time Money: – High-Yield Bonds: Where to look for quality junk. – High-yield bonds are paying more than they did a year ago, but investors still need to stay away from the junkiest junk.
Matthew Sauer Esq: – Best high-yield bond funds for 2015 – part 3. – In part three, we look at the offerings in the high-yield municipal bond space: SPDR Nuveen S&P High Yield Municipal Bond (NYSEARCA:HYMB), Market Vectors High-Yield Municipal Index (NYSEARCA:HYD) and the much newer Market Vectors Short High-Yield Municipal Index (NYSEARCA:SHYD).
Emerging Market Bonds
Bloomberg: – ECB to have bullish impact on emerging markets, SocGen says. – Emerging-market assets will stage a “pretty robust rally,” says Societe Generale SA. It’s “hard not to be bullish,” according to Aberdeen Asset Management Plc.
ETF Trends: – ECB stimulus to fuel emerging market ETFs. – As the European Central Bank turns on its printing press, emerging market assets and related exchange traded funds could sop up all the excess liquidity.
Businessweek: – Argentine bonds rise on bet opposition to gain from Nisman death. – The growing political damage to President Cristina Fernandez de Kirchner following an Argentine prosecutor’s mysterious death is bolstering speculation that an opposition candidate will win this year’s presidential election, fueling gains in the country’s bonds.
The World Bank: – Green bonds are changing investor expectations & making sustainable investing easier. – Green bonds are mobilizing billions of dollars a year for development projects that countries and cities need, carried out in ways that are good for the climate and environment.
FT: – A little market medicine to prevent the next pandemic. – (Subscription) ‘Pandemic bonds’ could inject private-sector rigour into global medical bureaucracies.
MarketWatch: – These bond ETFs protect your money from inflation’s bite. – Some investment analysts are recommending U.S. Treasury Inflation-Protected Securities (TIPS). If you agree, the best way to go about it is with index-based ETFs.
Citywire: – Absolute return: four most-improved bond managers revealed. – Ultra-low bond yields have forced investors to become very inventive when allocating capital to the fixed income universe, with the popularity of absolute return strategies rising as a result.
Zacks: – Janus funds attract $2.8B in Q4, profits jump. – Inflows to Janus funds were already indicative of the master stroke the asset management firm Janus Capital Group (JNS – Analyst Report) had played by roping in bond investor extraordinaire William Hunt “Bill” Gross last year in September. Gross’ move to Janus has now helped the firm record the first quarter of net deposits in over five years, further justifying the decision to recruit Gross.
Citi has gone fully bearish on munis: May be in period “where munis are likely to underperform Treasuries no matter what happens.”
— Brian Chappatta (@BChappatta) January 23, 2015
So much demand for government bonds. Maybe governments should make more of them?
— Joseph Weisenthal (@TheStalwart) January 23, 2015
Yield on 10 year bonds in USA 1.82% Spain 1.35% Germany 0.36% Japan 0.22% Switzerland -0.33% What a world.
— Neil Irwin (@Neil_Irwin) January 23, 2015