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CNBC: – Bond rates may inch up: Gundlach. – Increases in U.S. Treasury bond interest rates will mean a continued “buy,” DoubleLine Capital CEO Jeffrey Gundlach said Tuesday.
Reuters: – Fed: Slowing bond buys does not mean tightening policy. – Slowing the pace of Federal Reserve bond buying would not mean tightening US monetary policy and would help wean financial markets off their dependence on ultra-easy money from the U.S. central bank, one of its senior officials said on Tuesday.
ETF Trends: – High-yield ETFs see record volume at key support. – It could be make-or-break time for high-yield corporate bond ETFs that have seen trading volume surge after falling to a key technical support level. A breakdown here would be a worrying sign for credit markets, the S&P 500 and other major U.S. equity benchmarks, according to technical analysts.
WSJ: – Junk bonds: Active or indexed? – When it comes to investing in “junk” bonds, should fund investors put their money in actively managed funds or passive ones?
WSJ: – Junk borrowers wrestling with yield transition. – A rise in yields for bonds has begun to force borrowers of low-rated debt to pay more to entice investors. Market participants say that the transition from record-low rates to higher ones is catching some borrowers by surprise.
Reuters: – FINRA Warns about bond funds. – The Financial Industry Regulatory Authority FINRA has warned investors that bond funds could plummet by 10% as yields spike.
Michael Fabian: – Assembling your high-yield bond ETF game plan. – High Yield bond investors have already gone for a bit of a ride. Spreads are gyrating all over the place, and if you have lightened up on your high yield bond exposure over the last few months in anticipation of a better entry point as spreads inevitably widen; you should be paying very close attention to what happens next. Planning your future portfolio management decisions now will play a key role in re-establishing positions you may have let go of, or never owned in the first place.
Reuters: – With bond rout, muni market segment becomes even riskier. – The recent selloff in fixed-income markets could begin hitting the riskier high-yield segment of the $3.7 trillion US municipal bond market as investors demand more compensation for taking on the extra risk.
CNBC: – Junk bond volume piling up, but trouble lurks. – Global junk bond issuance is at record highs this year—and thus at the greatest danger should yields start rising.
Douglas Albo: – CEF strategies: Is it time to buy municipal bond CEFs? – Municipal bond closed-end fund (CEF) holders are feeling a whole lot of pain this year and last week was just another slap across the face. So is this the time to be stepping up to buy municipal bond funds?
Forbes: – Safe fixed income returns, even as bonds tumble. – Bond investors are faced with a rude development: total returns – that is, the combination of income and price movement – are now negative for the year (junk bonds aside). Who even remembers the last time that was true?
MarketWatch: – Game plan for a completely corrupted market. – Cody Willard asks. “Is the entire stock market and the system it supports (or that supports it?) completely corrupted at this point?”
MarketWatch: – Taxable muni bonds rally, but risks grow. – Municipal bonds, which generally are free from taxes, have long been a fixture in retirees’ nest eggs. But are the same products – without the tax benefits – a good fit for your portfolio?
David Fabian: – Why High Yield ETFs have stumbled and how to play them. – The best course of action if you are considering adding high yield to your portfolio is to start small and average into any new or existing positions. There is no way to tell at this point how deep this correction will be, which is why patience and planning will be the keys to success.
NASDAQ: – Don’t discard junk bonds just yet. – Wes Sparks, portfolio manager for the Schroder Total Return Fixed Income Fund, says the selloff in high-yield creates a buying opportunity.
Reuters: – DoubleLine floating rate fund opens to public on July 1. – DoubleLine Capital LP, the investment firm run by bond investor Jeffrey Gundlach, will open the DoubleLine Floating Rate Fund to the public on July 1, the firm said on Tuesday.
About.com: – “Higher quality” doesn’t necessarily mean “safe”. – With the bond market having sold off so much in May, investors could have found shelter from owning the highest-quality corporate bonds, right? Not necessarily. Today, Michael Aniero of Barron’s Income Investing blog reports that higher-quality corporates have been hit hard by rising rates in recent weeks. If you have a subscription to Barron’s, you can read the article here. If not, the main idea is that yields on higher-quality bonds have fallen so low that their “spread” versus Treasuries has made them extremely vulnerable to rising rates.
Waters Technology: – The lost generation of corporate bond platforms. – Corporate bonds today remain among the most manual instruments to trade. But it did not have to be this way. Starting as far back as the late 1990s, attempts have been made to automate institutional credit trading. In part one of this two-part feature, Jake Thomases looks back at what happened to those platforms.
Trustnet: – Beware niche alternatives to bond funds. – There’s still money to be made from traditional fixed interest funds, according to Stephen Snowden, who says investors looking for better yields elsewhere should be aware of the risks in alternative instruments.
The Capital Spectator: – Bond market allocations. – Allocations for Fixed Income markets as of May 31st. Compared to February, the US governments’ relative share ticked down a bit while US investment-grade corporates and junk is up slightly.
Biill Gross' Pimco Total Return Fund hit by outflows of $1.3bn in May – Morningstar Data (Reuters)
— Chris Adams (@chrisadamsmkts) June 4, 2013
"Current conditions represent buying opportunity for bonds" – Gundlach
— Chris Adams (@chrisadamsmkts) June 4, 2013