«With the Italian 10 -
year bond yielding less than its US counterpart, with clear signs of accelerating growth and inflation in Europe, and a depressed Euro adding fuel to the fire, assets correlated to European rates will be vulnerable in 2017,» says Mitchell.
Not exact matches
In the
bond market, the 10 -
year US Treasury
yield fell
less than 1 basis point, to 2.79 %, near the key 3 % level that traders are closely watching.
Concern remained over higher
bond yields after the
yield on the U.S. 10 -
year Treasury breached 3 percent level on Tuesday, making equities relatively
less attractive.
The Government of Canada 10 -
year bond yield is currently 1.4 %, which offers a real
yield of minus 0.6 % (1.4 %
yield less 2 % inflation) over 10
years.
The
yield on the current 30 -
year bond fell
less than one basis point to 3.37 percent.
In
bonds, the Market Climate remains characterized by unfavorable valuations and unfavorable
yield pressures, holding the Strategic Total Return Fund to a duration of
less than 1
year.
Currently, participants who have not taken a distribution receive interest credits at the rate equal to the 30 -
year Treasury
bond yield plus 0.5 % but not
less than 5 %; the «interest credit» rate is adjusted annually.
Contrast that to the S&P 500, which
yields just a fraction of a percent
less than the
bond and we expect will grow earnings at about 6 % per
year for the next five
years.
The cash
yield on the iShares CDN REIT Sector ETF (TSX: XRE) is approximately 5.45 %, a spread of
less than 2 % over the 10 -
year Government of Canada
bond, which is currently
yielding 3.55 %.
Medium - term inflation expectations of financial market participants, as implied by the difference between nominal and indexed
bond yields, have risen to around 3 per cent in October, from
less than 2 per cent at the beginning of the
year.
The current
yield on a 10 -
year U.S.
bond stands at
less than 2.5 %.
In early August,
yields on 10 -
year bonds were around 75 basis points above the cash rate, slightly
less than the average differential since the mid 1990s (Graph 66).
Indeed, with the US Federal Reserve finally beginning to hike interest rates and half of all European government
bonds of
less than five -
year maturity paying negative
yields, it would appear to us that the rate cycle is bottoming.
Even in a world where short - term interest rates will continue to rise as the Federal Reserve raises policy interest rates (most likely 2 — 3 times next
year) and where long - term rates should rise slowly as the Fed lets its balance sheet shrink, tax - free
yields should either stay the same or move down as the municipal
bond world confronts a market with much
less issuance.
That's 15
years of taking whatever the
bond market, CDs or TIPS will
yield (often and currently
less than 2 %)... I'm curious how you defend not following your own program even as you recommend it for others?
At this writing the 30
year US treasury
bond yields just 3.137 % —
less than half of the tax free municipal
bond!
High
yield bonds have more interest rate sensitivity with duration of just
less than 5
years and an average maturity of 6.8
years.
If your
bond yields 2 %
less than market but matures in a
year, then it's worth $ 98, but if it matures in 56
years, then it's only worth 0.98 ^ 56 = $ 32.
As we went to press, top
yields for a handful of five -
year GICs were around 3 %, compared with
less than 1.5 % on federal
bonds of the same maturity.
They invest primarily in high
yield bonds with an effective maturity of
less than three
years but can also have money in short term debt, preferred stock, convertible
bonds, and fixed - or floating - rate bank loans.
As a result,
yields on government
bonds with maturities of 10
years or
less are negative, according to Bloomberg data.
Short term funds that hold
bonds with maturities from 1 to 3
years are
less susceptible to rising
yields.
Mortgage rates follow the
yield on the 10 -
year Treasury
bond, so what is happening with the short - term targets from the Fed matters far
less.
A staggered
bond portfolio of ultra-short maturity high -
yield bonds of
less than seven
years will give you a solid, almost bulletproof portfolio with
yields exceeding 6 % to 17 % a
year.
The cash
yield on the iShares CDN REIT Sector ETF (TSX: XRE) is approximately 5.45 %, a spread of
less than 2 % over the 10 -
year Government of Canada
bond, which is currently
yielding 3.55 %.
Short - term
bonds with maturities of three
years or
less will usually have lower
yields than long - term
bonds with maturities of 10
years or more, which are more susceptible to interest rate risk.
This
year investors who followed the MFIP were led to shorten maturities (therefore lowering their interest - rate risk) and also to use higher -
yielding corporate
bonds rather than Treasuries or mortgage - backed securities (thereby keeping lower duration and
less interest - rate risk).
The current
yield on a 10 -
year U.S.
bond stands at
less than 2.5 %.
Historically, you have earned much of the
yield of longer - term
bonds by purchasing securities with five
years or
less to maturity.
The Fund provides exposure to the shorter duration segment of the high -
yield bond market, investing primarily in investments with an expected duration profile of three
years or
less.
But 10
years after retirement, retirees with
less remaining real wealth than the 2000 retiree faced much better market conditions in terms of lower cyclically - adjusted price - earnings ratios, higher dividend
yields, and generally higher
bond yields.
For those who prefer the security of government
bonds and are willing to accept a little
less yield, Mr. Berman suggested the Claymore 1 - 5
year Laddered Government
Bond ETF.
Those
bonds could sell at
yields less than the 10 -
year.
We devised an index to see how much earnings growth the market is pricing in a given time (S&P 500 E / P
less 7 -
year AAA
bond yield adjusted for one
year of earning growth).
That's below the
yield on 10 -
year treasuries, so the often - cited argument that the income generated from holding stocks is preferred to that offered by
bonds, holds far
less weight.
KTP also carries a unique call - option: callable at any time at a price that would make the
yield equal to the 30 -
year US Treasury
bond plus 20 basis points and never
less than par ($ 25).
The investment manager for the stable value fund invests in a portfolio of intermediate term
bonds with an average duration of approximately three to four
years that will provide a significantly higher interest rate, or
yield, than for example the short - term (average 60 days or
less) securities typically held by a money market fund.
These adjustments may cause the average annual compounded return on the particular Savings
Bond issue over 1, 2 or 5
years to be
less than the 1, 2 and 5 -
year reference
yields.
We wrote at the time: «As of 7:48 a.m. this morning, the spread between the 10 -
year Treasury Note (
yielding 2.33 percent) and 30 -
year Treasury
Bond (
yielding 2.81 percent) is even smaller, at a meager 48 basis points or
less than half of one percent.
The index includes both investment grade and below investment grade rated (i.e., «high
yield») securities and will include
bonds, in the aggregate, that have a dollar weighted average
years - to - maturity of three
years or
less.
«We continue to favor short maturity
bonds in places like Australia, Israel and South Korea where
yields between 3 and 5 percent have recently been available on
bonds with
less than two
years of duration and strong creditworthiness in our assessment.
It's true that interest rates are near historical lows: as of early May, 10 -
year Government of Canada
bonds are
yielding just over 1.5 %, and a broad - based
bond index fund like the ones I recommend in my model portfolios
yield a little
less than 2 %.
High -
yield bonds are typically issued with maturities of 10
years or
less, and are callable after four to five
years.
The portfolio might invest in a particular type of
bond (government, municipal, mortgage or high -
yield) or a particular maturity range (short - term: three
years or
less; intermediate term: three to 10
years; or long - term: usually 10
years or longer).
In one measure that Makin calls a «flashing red light,»
yields on 10 -
year Treasury
bonds, which rise with inflation worries, have slipped to
less than 3 % from 4 % in April.