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Bond Managers Eyeing Rising Volatility, Recession Potential
Another financial writer who doesn’t take into consideration total return when computiing performance for ETFs. Far from being down (1.9%). YTD, HYG is actually positive YTD on a total return basis, albeit barely. . A fairly large discrepancy for those of us who are into attention to detail. The other large junk bond ETF is down YTD to the tune of 0.61%. The YTD total return for LQD of a negative 5.8% is also inaccurate. The gist of the article was correct however in that junk is outperforming investment grade.
Although HYG and LQD are good for a quick and dirty look for a given bond sector; and are traded by investors who are playing against the big houses and hedge funds, I have not and do not invest with these etf's. The below chart is YTD for HYG compared to a decent managed HY fund, ARTFX , as well as LQD compared to a middle of the road corporate bond fund, FCBFX. These are total return numbers through today, June 27. Place the cursor at the far right end of the chart line of your choice to reveal the YTD.
ADD: investment grade bonds have been able to grab some positive ground and hold during this time of the unknown. Bonds barely moved during the mini melt in Jan./Feb.
NOTE: remain 50% equity in tech. and health, and 50% mmf at 1.5%. Sure don't like the tech. melt, though......
Possibly, similar to putting-off a hangover by drinking more?
OK - I’ve now complied with your request for more sophisticated posts and have read the article. It’s very technical in its approach to analyzing current attitudes of credit managers and other financial gurus. Suspect this is the kind of research based analysis of current financial opinions money professionals, including fund managers, get paid to digest.
Relevance to ordinary investors? Negligible. However, the excellent comments from several board members makes this thread of value.
Comments
Despite surge of market volatility, ‘junk’ corporate bonds are beating high-grade debt. What gives?
https://www.marketwatch.com/story/despite-surge-of-market-volatility-junk-corporate-bonds-are-beating-high-grade-debt-what-gives-2018-06-27
PTIAX +0.6% (multi-sector)
PRSNX -1.17% (world bond, multi-sector)
PREMX -6.41% (EM bond)
FNMIX -6.06% (EM bond)
The below chart is YTD for HYG compared to a decent managed HY fund, ARTFX , as well as LQD compared to a middle of the road corporate bond fund, FCBFX.
These are total return numbers through today, June 27. Place the cursor at the far right end of the chart line of your choice to reveal the YTD.
http://stockcharts.com/freecharts/perf.php?HYG,ARTFX,LQD,FCBFX&p=4&O=011000
ADD: investment grade bonds have been able to grab some positive ground and hold during this time of the unknown. Bonds barely moved during the mini melt in Jan./Feb.
NOTE: remain 50% equity in tech. and health, and 50% mmf at 1.5%. Sure don't like the tech. melt, though......
OK - I’ve now complied with your request for more sophisticated posts and have read the article. It’s very technical in its approach to analyzing current attitudes of credit managers and other financial gurus. Suspect this is the kind of research based analysis of current financial opinions money professionals, including fund managers, get paid to digest.
Relevance to ordinary investors? Negligible. However, the excellent comments from several board members makes this thread of value.