FMD Capital Management

Posts Tagged: bond etfs

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

ETF Investors Seek Shelter In Investment Grade Corporate Bonds

Written by David Fabian, March 07th, 2017

Rising interest rates are making many bond fund investors nervous about the prospects for weakening future returns and unstable risk dynamics.  This fear is putting some fuel behind ETF strategies that short Treasuries or sectors such as bank loans that have historically performed well in a rising rate environment.

The PowerShares Bank Loan Portfolio (BKLN), which invests in a basket of floating rate notes and senior loans, has accumulated more than $2.4 billion since the U.S. election.  That confidence has so far been rewarded with a steadily rising price trend versus the volatility that has pervaded most aggregate bond benchmarks.

Read the complete article at NASDAQ.com

Are High Yield ETFs Becoming Too Hot To Handle?

Written by David Fabian, February 17th, 2017

Love is in the air this Valentines week and many income investors are smitten with the returns of their high yield investments.  The steady march higher in assets like junk bonds, preferred stocks, emerging market debt, and even leveraged closed-end funds has remunerated shareholders for their faith.

The poster child of this strength may well be the iShares iBoxx $ High Yield Corporate Bond ETF (HYG).  This well-known fund, which invests in a passive index of high yield U.S. corporate debt, has gained more than 22% over the last year.  That jump includes both price gains and income distribution over a 52-week period.  It also bests every corner of the U.S. fixed-income sector map by a wide margin.  Read more

Why Bond Bears Need To Calm Down

Written by David Fabian, December 11th, 2016

Income investors are currently facing an uptick of concern over bond holdings that is reminiscent of the 2013 taper tantrum.  While it was no more than a few years ago, many are quick to forget the terror that resulted from a sharp rise in Treasury yields and concomitant fall in bond prices.  I can also starkly remember just how wrong 99% of economists were on predicting the future direction of interest rates in 2014 and beyond. Read more