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Post by yogibearbull on Dec 24, 2023 12:12:42 GMT
chang , the your FBND link is for 2021 M* report based on data to 04/2021 - I looked when I couldn't find quoted portions in the current report that is from 08/2023. Anyway, there are Archived reports for 2021 by a different analyst (Archive tab). When I looked at M* Chart to 04/2021, I also saw slight underperformance by FBND. BTW, 2020 was the crazy pandemic year with credit-freeze in early-2020. There were volatile flows in most funds. But M* shows that total CGs were 81.1% of income for FBND, 106.9% for FTBFX. But these differences are tiny to make any practical difference in why one would buy the ETF vs OEF. Vanguard had the patent on the ETF classes of OEFs. VG didn't license it to anyone else, but that patent has now expired. That is why the other firms could have only ETF cousins of their OEFs. Vanguard applied the patent to its index funds only, so its own active ETFs are cousins of its active OEFs - VG is very late to the active ETF area anyway.
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Post by anitya on Dec 25, 2023 2:52:18 GMT
/photo/1
Is there any correlation (positive or negative) between the survey and forward returns (even in the short run), especially in bonds?
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Post by Chahta on Dec 25, 2023 3:32:14 GMT
If you are looking to stay in bonds, OSTIX, DODIX, TSIIX, CBLDX, RSIIX, PTIAX all have done better than 7-12% in 2023.
MMHAX, a HY muni, has done 9% in 2023. While many bad-mouthed bonds they snuck in and did well.
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Post by junkster on Dec 25, 2023 3:52:52 GMT
/photo/1 Is there any correlation (positive or negative) between the survey and forward returns (even in the short run), especially in bonds? Not a believer In analogous analysis. If you are comparing December 2023 with March 2009….. In 2009 risk on portions of Bondland had their greatest returns ever - junk corporates, junk munis, bank loans with emerging market debt their second greatest ever. Most likely because 2008 saw their worst returns ever. Completely different environment now for risk on especially bank loans and junk corporates. |
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Post by yogibearbull on Dec 25, 2023 13:17:58 GMT
Not much should be read into good a rebound in bonds after a historic selloff.
Bonds do benefit when rates are higher as their reinvestment effects becomes stronger.
In some volatile markets (SC, EMs, gold), there are TA theories related to the deepness of selloffs and the strength of rebounds (Fibonacci ratios, etc), but I doubt those can be extended for bonds - may be for the junkiest of the junk.
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Post by anitya on Dec 25, 2023 18:07:12 GMT
junkster , The 2009 analogue is not what caught my eye but current level of bullishness itself in the survey. The Nov bullishness was easy to understand for me. Thanks.
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Post by Chahta on Dec 25, 2023 19:42:16 GMT
I recently started dipping into (and occasionally out of) TLT. Any thoughts on that theme? In general it should do well if rates decline. But as the yield curve normalizes, LT rates could increase (hurt TLT) or ST could decrease (good for me), or both It's a crap shoot I think. But in general I am looking for my bonds to have a good year. I do not own any long term bonds. Just IT and ST. |
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Post by anitya on Dec 25, 2023 22:59:10 GMT
This from Moody's as of last Wednesday -
The U.S. Bloomberg/Barclays high-yield option-adjusted
spread contracted to 334 bps from 363 bps the previous
week, while the ICE BofA U.S. high-yield option-adjusted
bond spread closed Wednesday at 343 bps, down a
whopping 36 bps from its prior-week value. This compares
with an average high-yield spread of 1,000 bps during recent
recessions and an average 350 bps outside of recessions.
The average spread since the high-yield market was
established in the 1990s is about 500 bps.
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Post by mnfish on Dec 26, 2023 12:10:18 GMT
apolloacademy.com/wp-content/uploads/2023/11/CreditMarketOutlook-112523.pdfA rather large PDF but on page 143 is an interesting chart on the timing of when credit spreads spiked during recessions and the current dislocation in HY spreads. A similar pattern in years leading up to 2001-02 and 2008-09 in that spreads didn't begin to spike until after the Fed began to cut rates. One of the authors states that currently - "To be sure, high-yield bond spreads haven't spiked, indicating the corporate bond market is "just as convinced as the stock market that the domestic economy remains solidly in growth mode," Nicholas Colas, co-founder of DataTrek Research, said in a note in November. and " Lagged (there's that word again) effects of monetary policy are slowing consumer credit growth with auto and credit card delinquencies rising and bank lending conditions tightening, leading to a significant slowing of loan growth impacting consumers and firms with weak balance sheets," he wrote
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Post by mozart522 on Dec 26, 2023 14:42:24 GMT
Chahta, My only LT bonds are tied up in PSLDX which uses a combination of long term bonds and S&P500 derivatives. Lots of IT corp and some IT treasuries and lots of short term. Most everything at Vanguard. Looking forward to a good bond year.
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Post by chang on Dec 26, 2023 17:03:27 GMT
Back to my search for where to roll over new bond money …. Anyone know anything about BINC? I was reading the article below regarding TCAF, but I read further and BINC caught my eye. Last six months, its chart looks much better than FTBFX, FBND, BOND, PYLD, etc. Would this be a good place to sock away $$ ear-marked for bond ballast? www.morningstar.com/etfs/3-interesting-new-etfs-2 |
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Post by mozart522 on Dec 26, 2023 18:13:10 GMT
chang, Well, it really is pretty new. It has about 30% junk and 30% cash so not a good comparison with your other examples. Only PYLD is a muti-sector like BINC. In short, you will be taking more risk than the others, so you should expect more return. Nothing wrong with that if you want it.
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Post by yogibearbull on Dec 26, 2023 19:05:47 GMT
I have multisector PYLD (Ivascyn/Murata). It dipped more than BINC (Rieder) in Oct, but then rebounded better. Both are only a few months old.
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Post by Chahta on Dec 27, 2023 14:06:35 GMT
Back to my search for where to roll over new bond money …. Anyone know anything about BINC? I was reading the article below regarding TCAF, but I read further and BINC caught my eye. Last six months, its chart looks much better than FTBFX, FBND, BOND, PYLD, etc. Would this be a good place to sock away $$ ear-marked for bond ballast? www.morningstar.com/etfs/3-interesting-new-etfs-22 comments on BINC. It has a lot of derivatives. And the duration is kind of short. I suggest DODIX or PTIAX. |
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Post by fishingrod on Dec 27, 2023 17:59:10 GMT
chang , I think bonds are getting a little stretched at this point. At least on the mid to long end. The ten year is already pricing in 6 rate cuts.
The short end still has value imo, but then reinvestment/duration risk is higher when/if rates come down.
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Post by Chahta on Jan 17, 2024 12:54:04 GMT
Note - based on this, I'm sticking with PIMIX. PIMIX
30-Day SEC Yield as of 11/30/2023 5.51%
Gross Expense Ratio 0.62%
Adjusted Expense Ratio 0.50%
PYLD
30-Day SEC Yield as of 11/30/2023 4.94-5.03%
Gross Expense Ratio 0.65%
Adjusted Expense Ratio 0.55%Most IT bond funds rose nicely along with equities in the last 8 weeks. PYLD went up 8%; PIMIX 6% in this short period. I think it is a short term bubble. If it was my money, I wouldn't be in a hurry to deploy it at the moment. I am currently accumulating cash and sitting it out. Those 2 are technically MS funds per M*. They use derivatives for duration and yield control. My bond positions were bought 2022 (early) and 2023. I have profit in several funds. They are there for some ballast but mostly the yield since I start RMDs in 2025. As an accumulator at heart it will hurt me to transfer to a taxable account. |
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Post by chang on Jan 17, 2024 13:02:56 GMT
I actually rolled the first T-bill into FTBFX at yesterday’s close (on a weak day for bonds).
Odd, isn’t it, that recently both bonds and equities have either surged or fallen together on the same day?
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Post by Chahta on Jan 17, 2024 14:46:50 GMT
I actually rolled the first T-bill into FTBFX at yesterday’s close (on a weak day for bonds). Odd, isn’t it, that recently both bonds and equities have either surged or fallen together on the same day? Welcome to the Santa Claus correction. Yes it is odd, mostly. My AKREX, CBLDX, RSIIX and OSTIX counter the trend often, as they did yesterday. Short duration and HY are doing well still. Interest rates are still the problem. The 10-year cannot settle on a direction and most likely won't until the threat of increases are done or the first cut is made. |
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Post by fishingrod on Jan 17, 2024 15:08:37 GMT
I actually rolled the first T-bill into FTBFX at yesterday’s close (on a weak day for bonds). Odd, isn’t it, that recently both bonds and equities have either surged or fallen together on the same day?
Equities and bonds are reacting to possible interest rate scenarios reacting to news. I think.
Moving Rates will be volatile until they aren't.
Bonds had surged a good bit in a short amount of time. I expected a little give back.
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Post by anitya on Jan 17, 2024 16:16:45 GMT
I actually rolled the first T-bill into FTBFX at yesterday’s close (on a weak day for bonds). Odd, isn’t it, that recently both bonds and equities have either surged or fallen together on the same day? Why is it odd - discounted cash flows results are effected by discount rate? On a daily basis or in the short run, equity cash flows may not change and then discount rates changing should impact both. I guess the reason for change in rates is important. |
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Post by FD1000 on Jan 17, 2024 23:28:06 GMT
I actually rolled the first T-bill into FTBFX at yesterday’s close (on a weak day for bonds). Odd, isn’t it, that recently both bonds and equities have either surged or fallen together on the same day? Welcome to the Santa Claus correction. Yes it is odd, mostly. My AKREX, CBLDX, RSIIX and OSTIX counter the trend often, as they did yesterday. Short duration and HY are doing well still. Interest rates are still the problem. The 10-year cannot settle on a direction and most likely won't until the threat of increases are done or the first cut is made. +1 and The above funds also do not have high correlation to rates. VGIT is down already 0.7% and DODIX over 1% YTD. chart ( schrts.co/pekMicwd) |
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Post by retiredat48 on Jan 18, 2024 0:53:28 GMT
My heavens, VGIT falling 0.7% ytd is but a blip on a chart, unless you expand the chart to accommodate small numbers.
Simple...bond rates rising, NAV price takes a dip.
Fact is, LT bonds do not trade in straight lines; they follow traditional sine wave patterns, always going up and down in rates/prices in waves.
R48
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Post by FD1000 on Jan 18, 2024 14:31:08 GMT
My heavens, VGIT falling 0.7% ytd is but a blip on a chart, unless you expand the chart to accommodate small numbers. Simple...bond rates rising, NAV price takes a dip. Fact is, LT bonds do not trade in straight lines; they follow traditional sine wave patterns, always going up and down in rates/prices in waves. R48 As always, I'm looking for a bond fund with good performance + low SD/risk + where do I want to invest at least 20% + less correlation to rates. VGIT isn't LT bond but inter. If I sold T-bill and looking for safer place, MM looks good, still paying over 5%. And then I would look for the following from "safer" to less at RPHIX, CBUDX, CBLDX. The next step are funds will less correlation to rates: RSIIX,OSTIX,DHEAX. I don't want to be in a less flexible fund with high correlation to rates because rates are difficult to predict and these funds have less options to invest in opportunities. |
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Post by chang on Jan 18, 2024 15:08:41 GMT
I don't get the desire to avoid correlation with rates. Rates have peaked: when rates fall, NAVs will rise. That's why I'm moving money out of MMs and into good core bond funds.
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Post by racqueteer on Jan 18, 2024 15:50:20 GMT
Can they avoid any more rate increases? I think it's still a little early to say. I certainly think the market is pricing in a lot more cuts (and a lot earlier) than is justified. Based on that surmise, while the idea of bond funds will pay off sometime, it might be a little early right here. Otoh, I've certainly been wrong before! 
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Post by Chahta on Jan 18, 2024 22:43:06 GMT
Can they avoid any more rate increases? I think it's still a little early to say. I certainly think the market is pricing in a lot more cuts (and a lot earlier) than is justified. Based on that surmise, while the idea of bond funds will pay off sometime, it might be a little early right here. Otoh, I've certainly been wrong before! Actually a little late. I have bond profits from 2023. But what is even better is I have a lot more shares to go along with rate cuts. However the shorter duration funds may not participate as much as the IT funds going forward. |
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Post by racqueteer on Jan 18, 2024 22:46:50 GMT
Can they avoid any more rate increases? I think it's still a little early to say. I certainly think the market is pricing in a lot more cuts (and a lot earlier) than is justified. Based on that surmise, while the idea of bond funds will pay off sometime, it might be a little early right here. Otoh, I've certainly been wrong before! Actually a little late. I have bond profits from 2023. Yeah, there was a little run in anticipation of those cuts; just as in the S&P and Nasdaq. I got my little run using TLT. Right now, though, that run seems to have ended. |
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Post by yogibearbull on Feb 6, 2024 14:30:39 GMT
chang , Yahoo Finance and FT charts are price-charts (i.e. without reinvestments). PV and StockCharts are with reinvestments; new M* Investors can do both. IMO, the time for FR/BL has passed. They are great when rate rise, OK when rates flat, bad when rates down (then, they are just ST-HY). FR/BL holders may enjoy the party with eyes on the exits. Time to keep rolling T-Bills has passed too.
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Post by chang on Feb 6, 2024 14:58:41 GMT
Time to keep rolling T-Bills has passed too. So I thought, too, when I started this thread. But, if rates just hover at current levels, rolling over ST T-bills may not be the worst thing. I bought FTBFX with my first T-bill, but my next two ... not sure yet. |
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Post by Deleted on Feb 6, 2024 16:44:10 GMT
I've been rolling over into TFLO (thanks YBB). I'm using bonds for income, so until it pays to take more duration or credit risk, I'm sticking with safer low duration high quality bonds.
TFLO 5.4% 30 Day SEC
BND 4.32% 30 Day SEC
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