30 Years of bond performance isn’t as advertised….NY Fed Responds….and more!August 23rd, 2012 by Simon G
Best of the Bond Market for August 23rd, 2012
Alephblog: – Bonds have not really outperformed stocks over the last 30 years – When we compare the long term performance of treasury bonds with those of stocks are we comparing apples with apples? Hindsight is a wonderful thing, but only if it’s based on accurate data.
Liberty Street Economics: The NY Fed responds to criticism over muni default report
Elliott Management: When the current forces in the bond market exhaust themselves the reversal will be swift and large – Macro comments from a top money manager.
Learn Bonds: – Managing your high yield muni fund exposure – With high yield muni funds riding high you might be tempted to sit back and watch the profits role in. But is that the best strategy or should you be looking to actively manage your muni fund exposure?
Minyanville: Should bond investors follow PIMCO and Buffett’s latest moves? - Buffett reducing muni market exposure and PIMCO reducing high yield exposure.
BondBuyer: – Feasibility studies for munis lead to overly optimistic projections? – Wildly inaccurate revenue forecasting can make or break your average public-private partnership project. The question is how accurate are these studies and can you trust them?
ETF Trends: – PIMCO High yield bond ETF is Morningstar top pick – PIMCO’s ETF for high-yield corporate debt which tracks shorter maturity bonds is Morningstar’s top pick for the popular sector.
Bloomberg: – The riskiest revenue debt in the muni market provided the best returns – Industrial-development revenue bonds have returned 10% this year, the highest amongst the 16 revenue-debt types tracked by Bank of America Merrill Lynch indexes. That compares with a 5.4 percent gain for the broader market.
ETF Trends: – Investment grade bond ETF is top seller – iShares iBoxx Investment Grade Corporate Bond Fund is the best-selling bond ETF in 2012, bringing in $5.2 billion so far this year.
Bond Squawk: Most bond managers have not adjusted forecasts on the back of the recent rise in rates – 77% of all managers maintained their neutral stance, making no bet on the direction of interest rates according to JP Morgan.
ETF Trends: – TIPS ETFs on the up as bonds sell at record negative yield – The demand for Treasury Inflation Protected Securities (TIPS) is so strong that investors snapped up 5-year bonds even though they have negative yields.
Of top 10 #muni Cusips searched for on Bloomberg, 9 mature in 2029 or longer; only Cal RANs from recent deal make the list that are short
— Muni Market Advisors (@Muni_Mkt_Advis) August 23, 2012
the 10 year area of the municipal bond yield curve has underperformed of late – you may be witnessing a sizeable snapback starting today..
— Michael Pietronico (@MillerTabak) August 23, 2012
Pimco has cut allocations to HY in its corp debt portfolios from about 12% to 8% due to “extreme valuations”.
— Jon Sticha (@jonsticha) August 23, 2012
Adding to tbt long now – 10 yr yields broke out at 1.67% (where we are now) – that yield nowbecomessuport. $TBT
— Douglas Kass (@DougKass) August 23, 2012