Best of the Bond Market for June 20th, 2012
NY Fed: Statement Regarding Continuation of the Maturity Extension Program – On June 20, 2012, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to continue through the end of the year its program to extend the average maturity of the Federal Reserve’s holdings of Treasury securities.
Business Insider: Fed Extends Operation twist
Rather than go on with full on QE3 (more bond buying), the Federal Reserve is extending what’s known as “Operation Twist” which means that the Fed will buy long dated Treasuries and finance that with sales of short-dated government bonds.
WSJ: Parsing the FED – How this statement changed from last
Full statement with changes from previous statement highlighted. Learn Bonds
Passive vs. Active Bond Funds: Which is Right for You?
Most bond investors will come out ahead by investing in a passively managed fund.
FT: Mohamed El-Erian
The Fed’s Second Best Solution – Wednesday’s decision signals that America is falling further behind its first best policy responses. And while the Fed should be commended for trying to deliver a second best, net benefits will prove even more difficult to secure. In the process, look for greater distortions that will take years to resolve.
BCA Research: Overweight U.S. Corporate Bonds
The path of least resistance for corporate bond spreads is to tighten in the absence of a recession or a sustained and intense flight-to-quality episode.
ETF Trends: A Top Emerging Market Bond ETF
ELD is an ETF that allows investors returns consisting of income and capital appreciation. The fund invests in local debt denominated in the local currencies of various emerging markets, according to WisdomTree. Countries represented include Brazil, Chile, Columbia, Mexico, Poland, South Africa and South Korea to name a few. Currently, ELD yields …