Bond ETFs

Bet on Higher Interest Rates with ETFs

February 17, 2013

Interest rates can’t stay low forever? Or can they? This week famed value investor Jim Grant announced to a group of ETF insiders that he was short the bond market, making an explicit call that he believed that rates would rise faster than yields could reward investors. The ETF space offers several opportunities for going [...]

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Junk Bonds: Adjusting for “The Great Rotation”

February 10, 2013

January 2013 was marked with the concept of a “Great Rotation” from fixed income to stocks. The premise is simple: after more than 30 years of a bull market in bonds, investors buying today are buying at record low yields. Relative to 2% on a 10 year treasury bond, a dividend-paying stock at a fair [...]

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Capitalize on Bond Market Inefficiency with These ETFs

September 30, 2012

The rise of the exchange-traded fund has forever changed the financial markets. With the click of a button, investors can now buy and sell hundreds of holdings with a single instrument. Long-term investors can buy established index portfolios for only a few basis points per year in expenses. And ETFs have significantly improved liquidity in [...]

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PIMCO Fund Seeks Global Yields with Inflation Protection

June 10, 2012

Carry trades are a key part of international speculation. Investors borrow funds in low-cost markets like the US and Japan to invest internationally for a higher yield. PIMCO thinks it can beat benchmarks to seek global yields with inflation protection. Its new fund, the Global Advantage Inflation-Linked Bond Strategy Fund (ILB) will invest in global [...]

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Municipal Rally – Oh How Meredith Was Wrong

January 30, 2012

In 2010 one brave analyst took to 60 minutes to give deliver a warning message: municipalities are broke. Meredith Whitney made a very controversial call, declaring state and local governments a poor place to invest. In particular, she noted her expectations for the future of the municipal bond market which included hundreds of billions of [...]

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Shorting Treasury Options: Profit, Rinse, Repeat

December 6, 2011

Every few months, I’ve been repeating the same pattern of shorting out of the money leveraged ETFs on US Treasuries and keeping the premiums when the options expire.  It’s been a nice way to supplement largely flat market returns with recurring income, and in my view, without taking on an inordinate amount of risk.  Since [...]

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Shorting Treasuries For the Ultimate Risk-Takers

September 6, 2011

While there are numerous ways to short Treasuries, there are several different approaches investors choose to take, each suited to a particular strategy and risk tolerance.  What I’m outlining today is both high-risk and highly likely to succeed – IF I can outlast the Fed.  See, I entered into the ultimate risk short today that [...]

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Muni Bond Market Imploding – How to Play It

November 22, 2010

While it was readily apparent years ago, and we were reminded again during the 2008-2009 financial crash, markets had temporarily forgotten that municipalities across the nation are virtually insolvent and should already have declared bankruptcy.  If they have not yet “restructured” their debt, they should and they will.  After decades of politicians writing checks the [...]

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How to Short Treasuries: With Yields this Low, Trade of the Century?

October 6, 2010

Treasury Yields continue to drift lower, breaking new records weekly it seems.  Many attribute the current rate to investors baking in a substantial Quantitative Easing measure (dubbed QE2) to the tune of $500 Billion to $1 Trillion, as well as some substantial announcements out of Japan recently on their QE program. Even high yield muni [...]

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