Something’s up at Morningstar….Bottom Fishing in Knight Bonds….and more!August 2nd, 2012 by David Waring
Best of the bond market for August 2nd, 2012
Wall Street Rant: There’s something fishy going on with Morningstar’s analyst ratings - only 7% of fund’s are rated negatively.
BusinessWeek: Those looking at Knight Capital Group stock might want to check out the bonds instead – The company’s $375 million of 3.5 percent convertible bonds due in March 2015 fell 10.125 cents to 73 cents on the dollar and yielded 16.7 percent as of 10:57 a.m. The bonds are convertible to stock at $20.87 a share.
Index Universe: 1 Year on the US S&P downgrade proved to “be one of the greatest contrarian indicators of all time”. – Treasurys of all maturities began rising the following Monday. They didn’t stop climbing, and really haven’t stopped yet.
FT: “What the US faces today is as much a political problem as it is an economic one” – Quote from PIMCO’s Mohamed El Erian’s latest piece.
Learn Bonds: Doug Kass’ “trade of the decade” looks more like the miss of the decade to us. Doug Kass has been wrong on treasuries for quite some time now.
ETF Trends: PIMCO’s Total Return ETF is up 8.3% since its march inception, compared to 4.7% for the Total Return Fund. The mutual fund took in $2 Billion last month vs. $563 Million for the BOND ETF.
Business Insider: The 6 main alternatives to treasuries – Muni’s, Sovereigns, Corporates, REITs, Dividend Stocks, Floating Rate Funds.
Zacks: Where to go for higher yields without straying too far off the reservation – They recommend 3 ETFs ISHG, AUNZ, BSJF.
The Financial Lexicon: 5 things to consider before selling your bonds. - just because asset allocation enthusiasts may tell you to lower the fixed income side of your portfolio doesn’t mean you necessarily should.
Skyler Greene: Thinks the Treasury’s new variable rate notes will be good for investors – Since the bond’s coupon payment is floating, the bond should theoretically retain most or all of its value as interest rates rise. This provides investors with short-term safety (preservation of capital) without locking them into the absurdly low rates offered by today’s bonds.
#Draghi drags it out, kicks the can.Someone must have gotten to him between London and Frankfurt.Trust fading fast.
— PIMCO (@PIMCO) August 2, 2012
That’s the game right there… RT @zerohedge: ECB bluffed Germany. And folded
— Cate Long (@cate_long) August 2, 2012
Things are pretty quiet on the muni front.We’re still scouring the market but suspect many investors just have #Olympic fever. USA! USA!
— Rochester Funds (@RochesterFunds) August 2, 2012
Draghi now on his soapbox forcing shorts to stay glued to CNBC…long term investors understand the ECB is at risk of going “under” too
— Michael Pietronico (@MillerTabak) August 2, 2012