Something’s up at Morningstar….Bottom Fishing in Knight Bonds….and more!

August 2nd, 2012 by

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.

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