Sentences with phrase «bond proxies»

The phrase "bond proxies" refers to certain types of investments that people buy when they want a steady income stream similar to what they would get from bonds. These investments might include stocks or other assets that pay regular dividends or have stable and predictable returns. The term "bond proxies" suggests that these investments can act as substitutes for bonds, providing investors with similar financial benefits. Full definition
Case in point: High - yielding stocks can sometimes serve as bond proxies, and lose value when rates rise.
Interest Rates are rising, and these stocks are often considered bond proxies... so when bonds fall due to rising interest rates, so do these stocks.
Remember, as bond yields rise, bond prices fall, as do the prices of bond proxies such as utilities, REITs and other high - yielding stocks.
And one that has been hugely beneficial for bond proxy dividend shares to boot.
When rates rise, as they have done, so - called bond proxies such as consumer staples typically fall.
This theme is central to how we suggest positioning portfolios for the coming year, including our preference for value shares over bond proxies, as this week's chart helps explain.
I think these are some of the best shorts in the current environment where bond proxies ought to suffer and a secular decline in retail ought to hurt renewal rates on the underlying leases.
This has created a «bond proxy paradox».
Rising interest rate expectations have lifted Financials while weighing on bond proxies like Staples.
Consequently, the two types of stocks that embed the greatest expectations — and carry the loftiest valuations — are income - oriented bond proxies (consumer staples, utilities) and self - sustaining growth generators (health care, technology, consumer discretionary).
High - yielding bond proxies did not offer downside protection in the February stock rout.
High - yielding bond proxies did not offer downside protection in the February stock rout.
Strong growth provides a solid foundation for stocks, we believe, but this experience makes it worth considering whether bond proxies can provide the same downside protection in the coming quarters as they have historically.
Investors sought to maintain the momentum of the equity markets by focusing on bond proxies, perceived safe havens, and companies with potential top - line growth.
So they aren't really bond proxies, says Gabelli & Company utility - stock analyst Timothy Winter.
This also means that triple net lease REITs, which are often used by yield - hungry investors in a low interest rate environment as bond alternatives, can be thought of as very long - term duration bond proxies.
The managers think simplicity is overvalued, highlighting the multi-year run - up in bond proxies that are perceived to be safe and offer low volatility.
Enhanced Yield clients have a dividend stock program with covered calls, designed as a cautious bond proxy and targeted for 9 % after commissions and fees, even in a sideways or slightly declining market.
Conversely slower growth companies like real estate investment trusts (REITs), utilities and telecom companies, which are seen as bond proxies because they deliver a steady cash flow to investors, have a tendency to lag as rate climb.
Consequently, the two types of stocks that embed the greatest expectations — and carry the loftiest valuations — are income - oriented bond proxies (consumer staples, utilities) and self - sustaining growth generators (health care, technology, consumer discretionary).
Strong growth provides a solid foundation for stocks, we believe, but this experience makes it worth considering whether bond proxies can provide the same downside protection in the coming quarters as they have historically.
The two dividend - sensitive sectors, which are considered bond proxies, fell as yields on 10 - year Treasury notes hit a 10 - month high.
The only sectors not participating are interest - rate sensitive REITs and utilities, which are bond proxies.
Rising inflation and interest rates should benefit cyclical sectors, such as Financials, relative to bond proxies,» Kostin added.
Mr. Roth recommends owning a laddered series of federally insured five - year certificates of deposit as a bond proxy.
It obviously depends on the maturity or bond proxy you are using.
Higher oil prices would reinforce current market trends based on reflation: rising long - term bond yields and a shift out of perceived safer assets — bond proxies and low - volatility stocks — and into cyclical assets such as EM.
Valuations also show the risk of owning bonds (and bond proxies) could rise further, as market uncertainty and easy monetary policy potentially drive valuations of interest - rate sensitive assets higher.
Any rise in interest rates and steepening in yield curves are also likely positive for financials but for «bond proxy» stocks, such as staples and utilities.
Risk factor analysis shows that equity market sectors that act like «bond proxies» may be more sensitive to changes in interest rates than bonds themselves.
The charts below show how the bond proxies are trading at valuations that are more than one standard deviation higher than their historic averages.
One of the often - heard concerns about rising rates is the negative effect it could have on «bond proxy» sectors such as utilities and REITs.
Investors may be tempted to add to bond proxies and related defensive stocks as their premium valuations to the rest of the market have lessened.
High - yielding «bond proxy» stocks earned their stripes as equity safe havens for much of the bull - market period, as bond yields were slow to revert back to pre-crisis levels.
Investors may be tempted to add to bond proxies and related defensive stocks as their premium valuations to the rest of the market have lessened.
Stocks from «bond proxy» sectors such as tobacco could be bad for your wealth, but many income funds are full of them.
One of the often - heard concerns about rising rates is the negative effect it could have on «bond proxy» sectors such as utilities and REITs.
High - yielding «bond proxy» stocks earned their stripes as equity safe havens for much of the bull - market period, as bond yields were slow to revert back to pre-crisis levels.
They are the information technology sector in the US (driven by the so - called «FANG» stocks of Facebook, Amazon, Netflix and Google) and the consumer staples sectors in the UK and continental Europe (driven by the so - called «bond proxy» businesses).
This year, the «valuation gap» between these racy US tech companies and traditionally «sleep - easy» bond proxies, and everything else has grown wider.
But when one compares bonds to stocks, be careful what you allow to be the bond proxy.
Valuations also show the risk of owning bonds (and bond proxies) could rise further, as market uncertainty and easy monetary policy potentially drive valuations of interest - rate sensitive assets higher.
The charts below show how the bond proxies are trading at valuations that are more than one standard deviation higher than their historic averages.
But the winners have also included stocks that looked like bonds — «bond proxies» — chased by investors for yield and stability, as central bankers pushed interest rates toward zero in a low growth environment.
Interestingly, in this environment there is an opportunity to buy stocks with similar fundamentals to the bond proxies but at lower valuations.
In fact, it is worth looking at how Vanguard S&P 500 (VFINX) has performed over the last 15 years relative to a bond proxy like Vanguard Intermediate - Term Bond Fund Index (VBIIX).
If interest rates rise, there is plenty of risk in both bond funds and stocks (utilities and classic dividend stocks) that are bond proxies.
I developed our approach as a bond proxy.
I don't know if that's true, but I am fairly certain that those policies have forced many income investors (think retirees and insurance companies) to invest in a group of dividend paying stocks that I refer to as «bond proxies».
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