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Here’s Why Investors Bought S&P 500 Bonds — Not Stocks — After Brexit

TedTed
in Fund Discussions
FYI: The bonds of companies in the S&P 500 index enjoyed a good run following the victorious “leave” vote in the U.K.’s referendum on EU membership — even as their stocks got crushed.

The strong performance baffled analysts at first because corporate bonds are considered so-called risk assets, if not typically as risky as their stock brethren. Demand for corporate bonds over government-issued debt, for instance, tends to rise when risk appetite spikes and fall when markets are in panic mode; that’s typically true of stocks, too.
Regards,
Ted
http://www.marketwatch.com/story/heres-why-investors-bought-sp-500-bonds-not-stocks-after-brexit-2016-06-29/print

Comments

  • Sven
    S&P500 bond index is available at Vanguard as Vanguard Intermediate Term Corporate Bond index, VICSX Admiral Share

    ER 0.10% with 0.25% purchase fee; SEC yield 2.96%

    The ETF equivalent, VCIT, has the same expense ratio and SEC yield, but without the purchase fee.

    I have been using this ETF since 2009 and quite happy with its low cost and consistent performance. YTD is 7.39%.
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