BOJ Strategy Set to Move US Bond Yields…Is EM Debt Undervalued?…Default Data Out… and more!March 22nd, 2013 by Simon G
FT: – BoJ strategy set to move US bond yields. – Bank of japan Governor Mr Kuroda says that the BoJ must buy long-term assets to push down yields across the curve. As Marc Ostwald, strategist at Monument Securities, observes, this strategy might also have implications for the US 30-year note.
Institutional Investor: – Is emerging market debt undervalued? – With no obvious explanation for emerging market’s debts recent stumble, investors may be looking at an attractive entry point.
Cate Long: – Credit raters unveil default data. – It’s the season for credit rating default data. Credit rating agencies issue this data about bonds that defaulted, along with the ratings those bonds had been given. Investors can use this data to see how much default risk they assume when they purchase bonds rated AAA or A or B. It’s a quantitative risk road map for bonds.
CNBC: – Billionaire Wilbur Ross: Long term bonds are a ‘huge risk’. – Investors should not own “long term debt of any kind” while the Federal Reserve continues its bond-buying program, private equity billionaire Wilbur Ross told CNBC on Friday.
Learn Bonds: – Revolutionizing the fixed-income funds industry. – Kurt Shrout looks at how the fixed income industry needs to evolve over the next few years in order to shield investors from increased interest rate risk.
Robert Wagner: – Why long-term Government Bonds are the ‘Dumbest Investment’. – Why are long-term government bonds the “dumbest” investment? The reason is; interest rates are at or near record lows, not just for treasuries, but many corporate rates as well. Bond prices and interest rates are inversely related. As interest rates fall, bond prices increase. With interest rates near or at record lows, bonds mathematically are near a peak. Unlike equities, bonds have a theoretical peak value when interest rates reach 0% interest. In a rising rate environment a shorter duration is better than a longer duration.
Reuters: – DoubleLine keeps hiring. – DoubleLine Capital LP, the investment firm run by star bond manager Jeffrey Gundlach, said Friday it has hired four stock analysts and a stock trader to expand the firm’s equity management lineup.
CFO: – The evolving bond market. – Floating a new bond issue is easy now, but changes taking place in the debt capital markets could make it much harder for some issuers in the years ahead.
ETF Database: – What’s in my international corporate bond ETF? – While most investors turn to iShares’ infamous iBoxx Investment Grade Corporate Bond Fund (LQD, A+) as their top choice for corporate bond exposure, interest in products that go beyond the prolific LQD portfolio has grown in recent years. For those looking to diversify their fixed-income exposure, international corporate bonds offer a compelling option. While these products do offer the potential for uncorrelated returns and attractive yields, it is important to take a close look at the portfolio compositions, which sometimes reveal information that investors should pay attention to.
Fort Mill Times: – Market vectors launches Treasury-hedged high yield bond ETF. – Market Vectors ETF Trust announced today that it has launched the Market Vectors Treasury-Hedged High Yield Bond ETF (NYSE Arca: THHY), an exchange-traded fund (ETF) is designed to combine the income potential of high-yield corporate bonds with the interest rate hedging capability offered by shorting Treasury notes.
George Schneider: – Hear the ka-ching as the air leaks out of the bond bubble. – Can you hear it? It’s in the air, it’s on the news, and it’s staring us in the face in the charts. The sound we have begun to hear, since mid-November, 2012 is the gradual leaking of the air out of the great Bond Bubble that has lasted over 30 years.
Barron’s: – More muni march malaise: Funds see weekly outflow again. – It’s now three straight weeks of net outflows for municipal bond mutual funds and exchange-traded funds, per the latest data from Lipper showing a $261 million net outflow for the week ended yesterday. This isn’t surprising, as I’ve noted before that March is historically the worst month for muni performance for a variety of reasons and often produces net fund outflows.
Barron’s: – Rising rates pose little threat to junk bonds. – Rising rates are typically a concern for high-quality, low-coupon bonds, such as investment-grade corporates. Historically rising rates are less of a problem for junk bonds, because their higher yield insulates them more from movements in underlying interest rates, but at a time of record-low junk bond yields some junk bond fund managers have begun to worry more about the impact of rising rates.
Bloomberg: – Puerto Rico on junk precipice gets investor ho-hum. – Puerto Rico, on the brink of being cut to speculative grade, is rallying the most in a year as investors bet that the 11-week-old administration of Governor Alejandro Garcia Padilla will mend the commonwealth’s finances.
CNBC: – Investors may hate bonds, but they keep on buying. – They are the investment everyone suddenly hates to love, but those bonds that were supposed to collapse this year continue to attract billions in investor money
Bonds gaining *after* POMO again.
— no bid. (@cr3dit) March 22, 2013
POW! Bonds positive.
— no bid. (@cr3dit) March 22, 2013
— Brian Chappatta (@BChappatta) March 22, 2013