Not exact matches
Bond investors
like mutual
funds and pension
funds hope to buy securities with comparatively higher
yields than other asset - backed debt that could also provide diversification benefits.
ETF.com: It sounds to me
like many of the
bond funds that are showing strength are ones targeting the long end of the
yield curve.
The
bond's interest rate is tied to a benchmark interest rate index
like the LIBOR, the federal
funds rate, or a specific duration U.S. Treasury
bond yield (in the case of Treasury floating rate notes).
Looking both within and outside of the benchmark, the
Fund seeks relative value opportunities across traditional investment - grade and high -
yield bond sectors, also including nontraditional asset classes
like non-U.S. sovereign and corporate debt, convertibles, and floating - rate loans.
Even if you are willing to accept some credit risk, and invest in something
like the popular Vanguard Total
Bond Market Index
fund, the SEC
yield is only 2.05 % (2.17 % for Admiral Shares, $ 10K minimum), still lower than the federally insured CD which has no credit risk.
To be clear, the DRS does not generate
yield like a traditional
bond fund with a monthly distribution.
Like some of its fellow nominees, the team followed up a stellar showing in 2011 with a strong 2012, owing much of the
fund's success this year to decisions made amid late 2011's stormy climate, including adding exposure to battered U.S. bank
bonds and high -
yield.
Rather than pursue cross-over corporates or high -
yield or even long - term investment grade corporates, we have stayed near the middle of the curve with
funds like: (1) SPDR Nuveen Muni (TFI), (2) Vanguard Total
Bond (BND), (3) iShares 7 - 10 Year Treasury (IEF) and (4) iShares 3 - 7 Year Treasury (IEI).
Most of them were preferred share and high -
yield bond funds or real estate investment trusts (REITs), but stocks
like Corus Entertainment Inc..
Investors
like long term
bond funds because of their increase in
yields over short term
funds.
For example,
bond funds, like the iShares Universe Bond Index ETF (TSX: XBB), are believed to have lower volatility ratings than stock funds, yet bond prices have recently fallen as yields have ri
bond funds,
like the iShares Universe
Bond Index ETF (TSX: XBB), are believed to have lower volatility ratings than stock funds, yet bond prices have recently fallen as yields have ri
Bond Index ETF (TSX: XBB), are believed to have lower volatility ratings than stock
funds, yet
bond prices have recently fallen as yields have ri
bond prices have recently fallen as
yields have risen.
«Many of the investors joining the dividend stampede appear to be motivated by the low interest rates mandated by the Federal Reserve, which have led to a
yield famine among traditional income investments
like bonds, certificates of deposit and money - market
funds,» Zweig writes, adding that others may be chasing performance, since high -
yield stocks fared well last year.
Also Canadian corporate
bonds may depreciate further in value.High Interest Bank Account instead of a money market
fund seems
like a pretty good idea if the
yields are higher.
To get any sort of real
yield in the current low rate environment, investors have been forced to go out on the maturity ladder and into longer - dated
bond funds like the iShares Barclays 7 - 10 Year Treasury (NYSE: IEF).
NoLoad FundX covers a wide variety of
bond funds, including
funds that aren't as sharply affected by rising rates,
like short - term
bond funds and high -
yield funds.
Key credit spreads were widening, such as those between intermediate - term treasury
bonds and riskier corporate
bonds in
funds like iShares Baa - Ba Rated Corporate
Bond ETF (BATS: QLTB) or SPDR High
Yield Bond (JNK).
MFIP can take advantage of these different kinds of
bonds, but the portfolio also includes important risk controls, such as limiting exposure to riskier
bond funds like high
yields and emerging market
bonds.
In the 2008 financial crisis, for instance, some high -
yield and strategic
bond funds lost 30 % or more, while higher - quality
bonds,
like short - term U.S. Treasury
bonds, had gains.
Like HYG, the SPDR Bloomberg Barclays High
Yield Bond ETF is an index
fund connected to junk
bonds — those same
bonds that are prone to bankruptcies and caused tremendous havoc during the oil crash of 2014.
Given these circumstances, a
bond ETF investor has to look at riskier propositions
like bond funds with higher duration (i.e. a measure of interest rate risk) since
bond funds targeting the higher end of the
yield curve generally have higher rates of interest attached.
There are a lot of desperate pension plans looking to make up for lost time, and hoping against hope, buying dividend paying and growth stocks, high -
yield bonds, alternatives
like hedge
funds, private equity, etc., at the wrong time.
This means
bond funds are falling as are safer
yield - oriented stocks
like telecom and utilities.
iShares iBoxx High
Yield (HYG)-- «A lot of the time, especially when you get into something like high yield bonds, you're better off sticking to mutual funds,» Jason
Yield (HYG)-- «A lot of the time, especially when you get into something
like high
yield bonds, you're better off sticking to mutual funds,» Jason
yield bonds, you're better off sticking to mutual
funds,» Jason said.
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 %.
Lastly, our advisors found a lot to
like about
Funds and ETFs this month, making recommendations in muni bonds, hedges, debt securities and high - yield f
Funds and ETFs this month, making recommendations in muni
bonds, hedges, debt securities and high -
yield fundsfunds.
The panel has suggested to «lower the mandatory proportion of G - Secs» in the Life
Fund and the Pension and General Annuity
Funds and allow for higher exposure in alternative higher -
yielding assets (
like equity or property) or high rated corporate
bonds» to help insurers generate a high gross return on investments so that insurance savings products can compare favourably in the financial savings space.