VCSH offers exposure to investment grade corporate bonds that fall towards
the short end of the maturity spectrum, thereby delivering a moderate amount of credit risk but limiting exposure to rising interest rates.
Overall, staying on
the shorter end of the maturity schedule can help the bond investor avoid negative bond returns, and provide for a pick - up in yield during a period of rising rates.
Not exact matches
Backtests
of an indicator using the yield curve (which is anything but random, owing to Federal Reserve control
of the
short end) show that some value can be added using this indicator to adjust
maturities.
With that said, seeing they already got the best
end, long - lived species will, in theory, benefit less than
short - lives species (who in them evolution favorizes (inverse) strategy
of massive sexual reproduction offspring output (quick sexual
maturity) to offset loss from specie's
short lifespan and gene dysfunction / unoptimization / inflammation as the survival strategy).
Short and intermediate
maturity treasury returns have forced performance seeking investors to assume the risk
of the longer
end such as the current 13.53 % return from the S&P / BGCantor 20 + Year U.S. Treasury Bond Index.
The increases on the very
short end of the curve led
shorter maturity muni rates to underperform and, remarkably, the very front
end of the curve in municipals inverted, with one - year
maturity muni averages lower than the SIFMA Index.
«Barbelling» a portfolio worked for many years where there was a balance between the
short -
end of the curve on the left side
of the barbell and longer
maturities invested on the right side.
In case you
end up choosing a
short term plan, you may be faced with a cash crunch as you will require funds before the
maturity of the policy.
While the policy has already accrued the bonus declared at the
end of the last financial year, there may be a
short period in between the bonus declaration date and the
maturity / claim date for which the policy has not received bonus.