Non-directional Bond Strategies…How Foreign Bondholders Affect Yield…and more!

bond market

Best of the Bond Market for August 27th, 2012

CFA Institute:Non-directional fixed-income investment strategies. – Many investors today wonder whether it’s too late to invest in bonds. But has the ship sailed? A handful of actively managed bond funds have shown significant performance in the face of a multitude of interest rate outcomes.

Seeking Alpha:The correlation between U.S. debt held by foreigners and U.S. bond yields. – With foreigners holding almost 50% of publicly traded debt, we show there is clear correlation between the amount of foreign owned debt and U.S. treasury yields.

Learn Bonds:How to choose a high yield bond fund. – Should you go for a passively managed or an actively managed fund? Find out the answer in our 6 step guide to choosing a high yield bond fund.

WSJ:ECB reiterates conditions for bond buys. – The European Central Bank (ECB) will only buy government bonds in parallel with the euro area’s bailout programs, Joerg Asmussen an executive board member for the central bank said today.

Bloomberg:New York’s credit outlook raised to positive. – New York offered a ray of light amongst the gloom of the muni market today as Standard and Poor’s raised their credit outlook for the first time since 2006.

Thomson Reuters: – Where do Fed policy makers stand on the Dove-Hawk scale – Here’s a chart showing where Fed policy makers stand on a scale of 1 to 5, with 1 signifying “doves” most likely to support further easing and 5 representing “hawks” most likely to oppose it.

BondSquawk: – Will Obama’s tax reforms be detrimental to the muni market? – President Obama’s proposal that tax exemption for municipal bond investors be reduced for high-income tax payers, individuals who earn in excess of 250,000, has sent shock waves through the muni market. Analysts claim this would be detrimental to the municipal market since it would reduce its attractiveness to investors.

Alliance Bernstein:The five biggest myths of retirement planning debunked. – There are certain myths that pertain to retirement planning. This post aims to dispel a few of the most common; including, should you switch your portfolio to bonds as you age?

BusinessWeek: Dell seeks to head off junk bond status. – Dell is being treated like a junk-rated borrower as their cash falls to its lowest level in a decade, with customers favoring tablets and smartphones over personal computers.

MarketWatch: How an obscure bond play could help consumers. – Sales of credit-card and auto-loan “securitizations” are on the increase. If this trend continues it could mean lower rates and easier credit for borrowers. Let the good times roll.

Empiritrage:The truth about bonds. – The general consensus is investors should hold some portion of their portfolio in bonds. Unless that is you have some magic ability to predict interest rates. In which case maybe you should consider a career change and start the next PIMCO.

Index Universe:Why are mutual fund managers buying ETFs? – Some people might find it surprising that mutual fund managers are jumping into ETFs. But it makes perfect sense.


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