FMD Capital Management

Posts Tagged: bond etfs

Comparing Bond ETFs: Same Yield, Less Interest Rate Risk

Written by David Fabian, January 16th, 2018

The two biggest risks that bond investors face are rising inflation and rising interest rates. This dual threat has been moderated for many years now as global central banks set accommodative policies to boost asset prices. The ultimate result of which has been tame inflationary metrics, steady jobs growth, corporate earnings expansion, and firm declines in Treasury yields.

The more recent roundabout (or tightening) of Federal Reserve fiscal policy has created a unique environment for bond investors to evaluate. Namely a flattening yield curve, whereby the 2-year U.S. Treasury Yield is sharply rising compared to its 10-year and 30-year counterparts.

Read the complete article at NASDAQ.com

What’s The Bull Case For International Bond ETFs?

Written by David Fabian, November 21st, 2017

This week’s ETF column was spawned by a thought-provoking statement on Twitter from one of my favorite follows @econompic.  He deftly pointed out the disparity in current yield between a risk-free savings account in the United States versus the paltry income derived from broad-based international bond ETFs.

For example, one can now easily earn 1.25% (or greater) in a savings or money market account versus the 0.73% current yield of the Vanguard International Bond ETF (BNDX).  This exchange-traded fund is considered one share class of the broader Vanguard International Bond mutual fund series, which combined house over $94 billion in total assets.

Read the complete article at NASDAQ.com

3 Underrated Bond ETFs For Your Income Portfolio

Written by David Fabian, August 25th, 2017

I write a ton of words every week on the topic of building income portfolios using exchange-traded funds.  Some articles are purely an exercise in research and education, while others are directed towards real-world concepts that we are implementing for clients of our firm.

It’s through this process that I often dive into a new fund or sector and compare it to an established group of peers.  It’s also refreshing to see funds that I have reviewed favorably in the past live up to (or exceed) their lofty expectations.  Read more

3 Smart Beta Bond ETFs You Need To Check Out

Written by David Fabian, July 12th, 2017

The world of bond funds is generally split along two distinct lines: active and passive. You either own the benchmark or you place your bets with the fund manager who is proactively trying to beat it. Both strategies offer numerous benefits and risks depending on your investment objectives.

With a passive index, you know exactly what you own and that you are going to get every tick of associated price movement from the portfolio. There are strict rules on what securities can be admitted and when they are rebalanced. These funds also offer the lowest costs in terms of direct investment expenses.

Read the complete article at NASDAQ.com

The 3 Biggest Treasury Bond ETFs And How To Use Them

Written by David Fabian, April 18th, 2017

Treasury bonds continue to be a stalwart position among income investors and those who opt for credit quality over yield or other characteristics of fixed-income.  Treasuries benefit from the highest credit rating possible and are backed by the full faith of the U.S. Government.  They are also the most directly susceptible to interest rate fluctuations and would perform poorly during a secular period of rising rates.

One attractive way to own Treasury bonds is through a diversified exchange-traded fund (ETF).  This vehicle creates the flexibility to directly hone in on a certain maturity or index methodology in an extremely low-cost and liquid package.

Read the complete article on NASDAQ.com