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Who’s Buying Bonds Now?…Bond ETFs Prove Costly…Short is Beautiful…and more!

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question-markInstitutional Investor: – Who’s buying now? Some long term investors are snapping up bonds. – Higher rates are improving funding positions of pension plans and encouraging funds to buy bonds for liability matching.

Bloomberg: – Crowded ETF exit proving costly as bonds trail. – Investors who sought exchange-traded funds as a faster way to trade corporate bonds are finding that they can be as expensive to trade as the underlying debt.

WSJ: – Short looks beautiful to bond investors. – As interest rates spiked in the second quarter, many investors in exchange-traded funds changed horses: from intermediate or long-term bonds to bonds with shorter maturities.

Learn Bonds: – How EMC’s new bonds stack up. – EMC Corp. recently issued new bonds, announced a share buyback and a dividend. The new EMC bonds due in 2023 yield  3.64%, larger blocks have gone for as low as $96.99 recently, with a 3.74% yield. Note bond prices have risen and fallen dramatically in the past 6 months. Now let’s take a look at how the new EMC bonds stack up.

Morningstar: – Worries about PIMCO total return overblown. – Morningstar’s Heather Brilliant says investors could see a lot of market volatility this upcoming earnings season, but that could make for tremendous buying opportunities of quality names.

MarketWatch: – How to avoid the bond market meltdown. – It’s bond-market basics but important to explain: As demand rises for “safe” investments, bond prices go up. If you are a bond issuer, such as a government or a corporation, heavy demand means you can get away with paying a lower yield. Borrowing gets cheaper. The current bond market is an anomaly, however.

FT Alphaville: – The bond fund outflow, charted. – [This] chart is from Credit Suisse Trading, which notes that June’s bond fund outflow of roughly $60bn represents the largest monthly fund flow — in or out, equity or bond — of any kind since records began in the early 1990s.

Markus Aarnio: – 2 high yield bond CEFs with recent intensive insider buying. – In this article, I will feature two high yield bond funds that have seen intensive insider buying during the last 30 days.

NJ.com:  – Bond trading not as simple as stocks. – For many investors, bonds feel more safe than stocks. For those folks, bond mutual funds feel safer yet. Take that a step further, and bond ETFs (closed-end mutual funds) feel even more safe. There are many reasons for this.

WSJ: – Even ‘high yield’ bonds don’t pay much. – Junk-bond yields have fallen so low that below-investment-grade bonds are no longer a compelling investment, says Charles Bean, a financial adviser in Westwood, Mass.

MarketWatch: – Yield hunters should consider global bonds. – For investors that need some more income to meet their retirement goals or who are looking to diversify the fixed income part of their portfolios, it may be time to start thinking global.

CNBC: – Bond yields getting closer to pain threshold. – The scale of the sell-off in U.S. government bonds has taken market watchers by surprise and yields are now fast approaching a “pain threshold” that could make the Federal Reserve think twice about unwinding its monetary stimulus too soon, analysts say.

Investors Chronicle: – Chicken and egg bond markets. – Since their inception, both the growth and income portfolios have adhered to a ‘Go high, go deep, go east’ investment strategy. A bias towards higher-yielding corporate bonds and equities, smaller companies and the Far East has served both well relative to their respective Apcims benchmarks. The recent sell-off in the bond markets suggests that government policy of ‘financial repression’ has entered a new phase – and investors should be positioned accordingly.

Bloomberg: – Texas A&M shuns tax-free debt for stadium. – Texas A&M University, Governor Rick Perry’s alma mater, is joining the biggest wave of taxable municipal-bond sales since 2010 to help finance the costliest stadium project in U.S. collegiate sports.

ETF Trends: – PIMCO short-duration ETF tapped as money-fund substitute. – PIMCO Enhanced Short Maturity (NYSEArca: MINT) was one of the best-selling ETFs in June as more investors are using short-duration ETFs in place of money market funds, which are facing reform measures.

MarketWatch: – Low volume and high volatility: How to profit. – In a world where traders are about to be driven to the beaches rather than driven by headlines, I’d expect cooler heads but hotter markets in the coming low-volume months.

Forbes: – Why bonds are set to bounce back. – I expect deflationary concerns to take centre stage again as the U.S. economy stagnates, Japan intensifies currency wars and thereby exports deflation while Chinese GDP dips below 7% by the fourth quarter. This will take any talk of significant QE tapering in the U.S. off the table while Europe and Japan continue to provide ample liquidity amid weakening economies. China will be the only country tightening policy as it resists calls to reflate its credit bubble. If this is right, bonds will be the big winners in the second half.

Russ Winter: – Little support for bonds. – Commercial banks are unloading Treasuries, and Agencies (GSE) holdings as well — $9.7 billion in the week ending June 19 after a $5.3 billion decrease the week before.

John Dowdee: – More income with less risk for retirees. – To insulate my portfolio as much as possible against interest rate risk, I looked at limited duration Closed End Funds (CEFs). This article discusses my analysis of these funds in terms of their risk-to-reward characteristics.

https://twitter.com/PIMCO/status/354237011567181824

https://twitter.com/Muni_Mkt_Advis/status/354249654877167617

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