Where to Find Corporate Bond Winners…Gross Cautious on Munis…MorningStar’s Bond Fund Manager of the Year..and more!January 4th, 2013 by Simon G
Morningstar: – Where to find future winners in corporate bonds. – Morningstar 2012 Fixed-Income Fund Manager of the Year Mark Kiesel says housing and energy sector bets proved positive last year, and he sees multiyear growth potential in these and other areas.
Bloomberg: – Gross ‘cautious’ on municipal bonds as tax-benefit debate looms. – Bill Gross, manager of the world’s biggest bond fund, said he’s taking a “cautious” approach to state and local debt on the view that Congress may change the tax-exempt status of the securities.
Thomson Financial: A great chart of yearly bond issuance broken down by credit rating - Issuance by lower rated credits growing the most.
Learn Bonds: – 6 market predictions from bond guru Jeff Gundlach. – DoubleLine Capital founder and CEO Jeff Gundlach, gives 6 market predictions for the year ahead.
Morningstar: PIMCO’s Mark Kiesel wins MorningStar’s 2012 Bond Fund Manager of the Year – Manages their investment grade corporate bond fund.
AllianceBernstein: How to evaluate high yield bank loans - Recently, many investors have flocked to high-yield loans, assuming that floating-rate coupon payments will provide better insulation against rising interest rates than high-yield bonds will. Historically, though, this hasn’t been the case.
MarketWatch: – 10 steps to rebuilding your retirement portfolio. – With interest rates at historic lows and no change in sight, retirees are finding that the “risk-free” investments they were so eager to buy are not meeting their needs (to say nothing of their desires) for a stable retirement income. What’s needed is a plan to rebuild their retirement portfolios and regain their faith in the future. In 10 steps, any investor can do that. Let me show you how.
The Market Oracle: – US Treasury bond market’s last pillar crumbles. – With the return of Shinzo Abe and his Liberal Democratic Party to power in Japan, the market for US Treasuries may be losing its last external pillar of support. This is significant to the global economy as Japan is the largest foreign power left with a strong appetite for US Treasuries. If this demand falters, the Fed may be the only remaining buyer of new Treasury issuance.
Bond Buyer: – Muni rates to slightly increase in 2013. – Bank of America Merrill Lynch expects some modest increase in muni rates next year of around 25 basis points to 1.93% on the 10-year triple-A bond, and 3.10% on the 30-year triple-A bond. That estimate is based on B of A’s average ratios to Treasuries, which are estimated to go up during the second half of 2013 to 2.0% in the 10-year and 3.25% in the 30-year.
iStockAnalyst: – Wise move for 2013? Buy corporate bonds. – Here’s a simple fixed income allocation strategy that involves buying individual investment grade corporate bonds and holding them until maturity. Build a ladder of individual, investment-grade corporate bonds for the bulk of the portfolio and invest the rest in a high yield fund such as DoubleLine’s Total Return Bond Fund.
Research Puzzle: – Understanding the yield curve. – Everyone talks about the yield curve but do you understand what they’re talking about. To help you out, Tom Brakke has created this handy chart to check and see how the yield curve looks versus the last few decades.
SentimentTrader: – Investor Warning: Stocks and bond yields, rallying together. – Bond yields rallying on their own could be taken as a good sign of an improved economic outlook, but as we’ve discussed multiple times over the years, generally it’s not a great sign when stocks and bond yields rally to multi-month highs together.
WSJ: – Happy New Year? Not for bonds. – Investors leave the safety of Treasurys after budget deal, and signs of improvement in employment market.
Bloomberg: – Muni bonds gain appeal as rich seek to blunt tax increase. – Municipal bond and other tax-exempt investing strategies may gather more money as wealthy U.S. investors respond to higher tax rates approved by Congress this week.
BusinessWeek: – As credit quality slips, bond investors need to be cautious. – Falling corporate bond prices most often beget falling share prices. Witness 2001-2002 and 2007-2008. So after a year of record debt issuance on record stingy terms, it pays extra to be vigilant.
Barron’s: – ETFs for a rising yield curve. – If you worry that the Federal Reserve is shutting off the bond-buying spigot, there are ways of dealing with a rising yield curve, including avoiding bonds all together.
MarketWatch: – Bond ETFs hit by Treasury selloff. – A pretty bad first week of the year for Treasury bonds has put pressure on bond exchange-traded funds.
Gross: 7.8% still a few years away from the 6.5% Fed tightening target. 5-yr yields at .83% look reasonable.
— PIMCO (@PIMCO) January 4, 2013
weekly reporting #muniland funds saw 3rd week of outflows at $13mn. LT had $294mn outflows, HY w/ $104mn outflows, Interm w/ $4mn outflows
— Taylor Riggs (@TaylorRiggs_BB) January 4, 2013
— Muni Market Advisors (@Muni_Mkt_Advis) January 4, 2013
Two things that Meredith Whitney called correctly: 1) People will flee high tax states (NJ) 2) Pensions became a much bigger issue #muniland
— Cate Long (@cate_long) January 4, 2013