Ishrc � Discussion Threads

[borderbill] 26/11/2009 09:40

Ive been out of these (and everything else, except for a recent purchase of IBTS) since end sep but would love a pull back to allow me to get back in for those lovely dividends. I wonder if the Dubai news I saw on the telly before the school run will widen spreads in the short term ? Bill

[lbo] 18/11/2009 21:49

The iShares € Corporate Bond ETF has a gross redemption yield of 3.13% according to a fund factsheet published three days ago, available on the iShares website. The iShares DJ Euro Stoxx 50 ETF, which represents the largest 50 Eurozone blue chips, yields almost exactly the same (3.14%) according to the website. And if you take a dividend-weighted fund, the iShares DJ Euro Stoxx Select Dividend ETF, you get an extra percent in yield at 4.14%.

In the UK, things are less in favour of equities, partly because the iShares £ Corporate Bond ETF has such a major weighting (48%) in high-yielding financials, generating a current gross redemption yield of 6.01%. The iShares iBoxx £ Corporate Bond ex-Financials ETF yields a little less at 5.18%. On the equity side, the iShares FTSE 100 ETF yields 3.42%, the iShares FTSE 250 ETF yields 2.42% and it's only when you go to a dividend-weighted fund, the iShares FTSE UK Dividend Plus ETF, that you get a yield close to that on corporate bonds – 5.21%

[davebowler] 08/11/2009 16:23

Absolutely -its a cheap way into junk bonds but ones which are at largely variable interest so at least there is some protection against rising inflation/interest rates

[ptolemy] 06/11/2009 16:04

dave, true. But did you see that 2 of the loans went bad last quarter and loans rated junk comprise >50% of the fund? Good yield (and I've held several times) but not without some risks...

[davebowler] 06/11/2009 10:38

HDIV is now 9% below asset value whereas CHY is 6% above asset value- crazy!

As at close of business on 4th November 2009, the unaudited net asset value per
share, calculated in accordance with the AIC formula (including current
financial year revenue items) was 74.7p

[borderbill] 04/11/2009 12:10

Yes, but most of the downtrend is just the weakness of the longer end of the gilt market rather than a widening in spreads I expect. Dont know any shorting vehicles of corp bonds but you can go short of long gilts on IG index. I am 100% cash at the moment and see no value in equities over 5000 and little value in gilts unless 10 year yields hit 4%. Bill

[ben gunn] 02/11/2009 11:14

Borderbill
I am no chartist but you asked "when do people think the corp bond rise will end":
Today SLXX is breaking down below 117.5 where it appears below its 20 day and 50 day moving averages.
I would suggest that it is already clear that SLXX has ceased to be a good BUY and if the 5 day moving average crashes down through the 50 day moving average (tomorrow?) then SLXX will cease to be a hold.




On IG Index I cant short SLXX. Is there a similar ETF that I can short?

[erpetao] 20/10/2009 11:51

I got a google news alert today about SLXX:

[davebowler] 09/10/2009 10:55

I am setting this up as a possible site for LLPF NWBD CPBA CPBB NABA etc contributors;
Look under epic code PIBS

[morsimon] 08/10/2009 22:40

Any idea why such a big rise today ? Any views welcome - seems very out of character to me.

[borderbill] 07/10/2009 09:23

richied, thanks for that, I hadnt noticed the arrival of ISXF and will monitor relative performance vs SLXX. It has a slightly shorter average maturity but still too long for my tastes at the moment, I cant see the long end of the gilt market staying up here on a 6m view so prefer cash at the moment. Bill

[kiwi2007] 07/10/2009 07:50

Investor appetite for corporate bonds does not appear to be waning

Statistics from the Investment Management Association show the asset class was the best selling sector for the tenth consecutive month, registering net inflows of £436 million in August.

This has come on the back of strong performance of corporate bond funds.

According to Lipper, the average corporate bond fund has returned 1.6% in the 12 months to the end of Lipper. This compares to an average decline of 9.3% in UK All Companies funds.

But can the good times continue for corporate bond funds? Fidelity fixed income fund manager Curtis Evans sees six reasons why they can, as he explains below:

[kiwi2007] 05/10/2009 14:03

Explains the variations of the NAV from time to time

"..........most bond ETFs are bringing in new money now, so the dealers responsible for creating ETF shares need to constantly buy new securities. That takes place at the higher "offer" side. To compensate, dealers will price the ETF shares higher than NAV, resulting in the bias toward a premium.

If it's a matter of buying and selling at inflated prices, it's a wash. But sometimes, investors who bought at a premium end up selling at a discount. "If everybody is selling, it's also a time where there may not be much liquidity in the bond market, and...funds will be trading at NAV or at a discount to NAV," says Kenneth Volpert, a principal at Vanguard Group.

In fact, when investors fled corporate bonds last fall, many bond ETFs traded at meaningful discounts. This year, some $25 billion has gone into bond ETFs, a good portion of which is chasing big returns in high-yield bonds, which are notoriously difficult to trade in tough times. How would ETF prices handle that money being pulled out in a flash? "

[richied] 01/10/2009 20:14

I see that ishares have a new fund ISXF, corporate bonds with no financials, yield is is less but could be more attractive as home for cash as I have enough fixed interest financials so I'll keep an eye on it . There is also a Euro denominated one, IEXF, which would be attractive if you view more sterling weakness against Euro.

[davebowler] 01/10/2009 16:35

Try HDIV - run by John Patullo of Hendersons -c.4% below asset value too

[kiwi2007] 29/9/2009 14:17

Doesn't work for me either - looks like a programming problem?

I'm still holding quite a few SLXX but have moved a lot of funds into the riskier end - av.a av.b gacb at the lower yield end through ncyf to junk with ilh plus llbc/g/e naba cpbc and IEMB (emerging market gvt bonds)

Particularly like NCYF - excellent fund manager and 50% of the bonds are not in Stirling (ILH are similar but I'm not sure of the pedigree of the managers).

[ptolemy] 28/9/2009 16:29

Anyone know if Bondscape daily prices are still available? Doesn't work for me. As far as I know it was the only service that provided closing bid/offer prices - unless anyone knows different?

[richied] 28/9/2009 13:01

I too have sold down my holdings over the last two months and have increased my holding in NWBD ( Natwest prefs ) at nearly double the yield. They have been a good proxy for cash in my Sipp. I still have a small holding in INXG, index gilt ETF, which has also been a good cash proxy and am thinking of swapping into XUKS, UK index short ETF, as a hedge.

[borderbill] 28/9/2009 12:40

For what it is worth I have sold my holdings of SLXX and my conventional and index-linked gilts, of varying maturities, over recent days. I cant really see the longer end of the gilt market sustaining these levels and margins have come in a fair bit in recent months. The problem is what to do with the money, I struggle to recall a time when I was less tempted by any investment class. I will check this thread periodically for any views. Bill

[humphbumph] 14/9/2009 13:20

I agree. Although I am by nature an adventurous investor I have parked a fair wodge in these over the past six months and it has, without fuss, appreciated a lot in value and spun off a very nice income too.

[kiwi2007] 14/9/2009 13:15

I must have read a dozen articles regarding corporate bonds this last week - 50% say they've had their day and the other 50% say they've further to run :o(

Personally I find it hard to see a much better home for cash at the moment and with all the QE around I think there's a huge amount of money looking for a relatively safe home - which ought to offer some sort of security to holders of SLXX.

[borderbill] 07/9/2009 09:28

Thanks for this, bill

[davebowler] 04/9/2009 16:18

Try looking at HDIV as an alternative to SLXX .Its run by John Pattullo ,below asset value and giving a higher yield too.

[ptolemy] 03/9/2009 09:10

Further out on the risk spectrum I like investments that are $ denominated, so you get (hopefully!) a capital gain and a currency gain (if $ appreciates, as I expect). Things like (long or short) US treasuries and gold/silver. Also dollar index via UUP.

[borderbill] 02/9/2009 22:28

Thanks Kiwi, in my experience prefs are a minefield, even when I did this stuff for a job I got burnt, I dont have lots of time for reviewing my investments, so I will keep to the higher end of the credit priority chain. Its tempting tho as the income is franked on prefs, and I invest through a ltd co. The more I think about it I might just do nothing for a while until some low risk value appears again. Considering how panic stricken I was a year ago about bank deposits I should be happy with the outturn from my dull SLXX and short ILG investments.I willkeep an eye on all your posts in this thread and others (so much better than the desperate gambler type threads), thanks , Bill