Written by David Fabian, February 14th, 2018
The inherent fear of rising rates is something that income investors have dealt with through every major market cycle. Many have stubbornly adhered to the notion that the Fed’s monetary decisions and other fiscal shenanigans in the U.S. will ultimately cause a severe disruption in the bond market. Additionally, there has always been this chronic concern that inflationary pressures lurk just around the corner and will ultimately put pressure on bond prices. Read more
Written by David Fabian, November 06th, 2017
One of the closed-end funds that seems to be a recurrent favorite on our watch list is the DoubleLine Opportunistic Credit Fund (DBL), run by Jeffrey Gundlach of DoubleLine Capital. This unique actively managed portfolio was the first of its kind to debut from DoubleLine back in 2012 and has developed a cult following among CEF investors.
DBL primarily invests in a mixed basket of mortgage backed securities, collateralized loan obligations and other asset backed securities. The fund has just over $325 million in total assets with a relatively tame 16% leverage ratio to boost its net exposure. It currently yields over 8% annually and income is paid monthly to shareholders. Read more
Written by David Fabian, November 22nd, 2016
Most investors purchase bond funds with a degree of interest rate sensitivity. This is by design as they want to experience the off-setting effects of falling interest rates in exchange for capital appreciation of the underlying bond portfolio. It’s a built-in risk mechanism that has been a successful diversification component when paired with stocks and other assets higher up the volatility scale.
Yet, after decades of falling rates, the long-term return expectations of many bond funds have fallen dramatically. There is also growing concern that even a modest rise in Treasury yields will create a significant shift in the risk appetites of bond investors. With so much anxiety surrounding the recent jump in interest rates, now may be a prudent time to explore the menu of bond ETFs with an embedded hedging component.
Written by David Fabian, November 13th, 2016
It feels like we have almost packed a full year’s worth of stock market price action into just the last two weeks. With so many diverging market sectors and overall fluctuations, I thought it would be prudent to do an examination of some key charts.
Taking a closer look at these categories can help frame macro views as well as determine areas of strength and weakness. Read more
Written by David Fabian, September 01st, 2016
If there is one major theme that pervades the financial markets this year, it’s the shift from stocks to bonds. You can romanticize about the momentum in gold stocks. You can peek over at emerging market strength, but nothing compares to the pervasive re-allocation of global assets. Read more