Prepare For Apple iBonds …Which Bonds Are Most Tax-Efficient …What to Expect From A Bear Bond Market… and more!


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Quartz: – Why is Apple borrowing money to pay investors when it has more cash than ever? – The big news from today’s Apple earnings call was the expansion of its plan to reward investors with a bigger dividend and more stock buy-backs. But though the company has more cash than just about any other in the world (or in history), Apple will borrow the money it will give to investors.

Oblivious Investor: – Which bonds are most tax-efficient? – A reader writes in, asking: “I know that some stocks relative to other stocks are more efficient regarding taxes [eg foreign stocks being better because of the foreign tax credit] but what about bonds? If investing in a taxable account, are some bonds better than other bonds?”

Anthony Valeri: – What to expect from a bond bear market? – The following table shows the peak to trough declines in total return for a particular period – meaning an investor would have bought when prices were at their highest, and yields lowest, and similarly sold when prices were at their lowest and yields highest, to achieve the total returns shown.

Learn Bonds: – CDs and investment-grade corporate bond ETFs: Which ones are best? – IBCE (the iShares Bond 2023 Corporate ex-Financials Term ETF) began trading on Friday, April 19.  The availability of this fund significantly changed the CD and corporate bond ETF (exchange-traded fund) investing landscape.  Now that this fund has been introduced, what are the best CD and investment-grade corporate bond ETF purchases?  This article will answer this question.

WSJ: – ‘Target’ funds vulnerable to rate rise. – Millions of workers saving for retirement risk losing part of their nest eggs if interest rates jump. The cause for concern: target-date mutual funds, designed for investors who lack the time or expertise to balance their investment portfolios. The funds typically increase their bond holdings with the approach of the target date, which is pegged to the investor’s expected retirement year. In theory, more bonds should make portfolios safer, because bonds tend to be less risky than assets such as stocks. But if yields rise and bond prices slump, as many experts predict, the funds could suffer losses.

Bloomberg: – Federal reserve has fueled housing rebound, PIMCO’s cudzil says. – The Federal Reserve’s debt buying has helped housing both by holding down borrowing costs for homebuyers and pushing investors to purchase properties instead of bonds, Pacific Investment Management Co.’s Michael Cudzil said.

Bloomberg: – PIMCO reduced its holdings of Spanish, Italian bonds. –  Pacific Investment Management Co. cut its holdings of Spanish and Italian government debt starting last month after a rally in the securities, according to Andrew Balls, the London-based head of European portfolio management.

FT: – BlackRock and MarketAxess join forces. – BlackRock, the world’s largest fund manager, is teaming up with a widely used trading platform for US corporate bonds in an attempt to concentrate volume in one venue and offset the retreat of Wall Street dealers from supporting this $9tn market.

SacBee: – Jerry Brown urges budget restraint despite strong revenue. – Despite relatively robust income tax returns and a projection that the state will finish April billions of dollars ahead of estimates, Gov. Jerry Brown today dismissed a reporter’s suggestion he must be “pretty happy,” suggesting any overage may be tied up by Proposition 98, California’s school-funding guarantee.

Bloomberg: – PIMCO’s rising stars pull in money for future after Gross. – Pacific Investment Management Co. is becoming less dependent on Bill Gross, preparing for an eventual future without the world’s best-known bond investor and adding pressure on its rising stars to live up to his legacy.

Barron’s: – Are dividend stocks a bond substitute? – Alex Eule interviews JPMorgan advisor Peter Siegel on how to get income without taking excessive risk.

Cate Long: Gallagher’s muniland armageddon. – Several professionals in muniland have jumped on SEC Commissioner Dan Gallagher for his recent warnings about the possibility of an “Armageddon” for retail investors in muniland. I interpreted Gallagher’s concerns to be related to the lack of liquidity in the market and the steep transaction costs that retail investors pay when they have to trade out of a position.

John M. Mason: – Invest in US Treasuries. – Should one invest in United States Treasury bonds? Even with the low yields that exist in today’s financial markets this is perhaps one of the best investments you can make in terms of return…when there is very little risk associated with the investment.

What Investment: – Equities and corporate bonds ‘rapidly approaching a breaking point’, warns L&G. – Legal & General Investment Management has expressed alarm at the continued lack of economic growth despite the concerted efforts of central banks to provide stimulus through quantitative easing.

ETF Daily: – Time to buy the iShares investment grade corporate bond ETF? – Markets have been quite sluggish in April, as a lukewarm earnings season has taken its toll on stocks across the board. This trend has pushed many investors into safer sectors like utilities or health care for equities, and back into bonds once more as well. In particular, we have seen a broad move back into corporate securities, as these offer a nice mix between yield and safety which could be ideal in this environment.



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