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President Obama's Dividend Tax Hike: A Positive for Bonds?

Wed, 22 Feb 2012 18:02:31 +0000

On Thursday, the Wall St. Journal reported that President Obama's 2013 budget proposal contains a potential ticking time bomb: a plan to raise triple the tax investors pay on stock dividends. The WSJ reports that President George W. Bush's dividend tax cut, which went into effect on January 1, 2003, led to a substantial rise in the amount of cash U.S. corporations paid out in the form of dividends. Higher dividends and elevated after-tax yields, in turn, contributed to the bull market in equities that characterized the middle of the last decade.

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Bond ETF Inflows Surge to Record Levels

Wed, 22 Feb 2012 12:02:52 +0000

Bond ETFs continue to rake in investor cash, according to a recent report by the BlackRock Investment Institute via the website of one of the leading ETF providers, iShares. The report states, "...fixed income ETPs (exchange-traded products) set a new global monthly record, attracting $9.0 billion in January 2012, up from the previous monthly record set of $6.7 billion set in January 2009." The iShares report refers to this massive inflow as "a continuing market 'revolution' globally as investors increasingly turn to fixed income ETFs in an effort to help restore investment yield to their portfolios."

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China Reduces its Holdings in U.S. Debt

Thu, 16 Feb 2012 11:45:15 +0000

According to the December data released yesterday by the Treasury Department, China - the largest owner of U.S. debt - reduced its position in Treasuries to the lowest level since June of 2010. China now holds $1.11 trillion of U.S. debt, a reduction of 2.8% from November, 2011. The Chinese government cited the need for greater diversification and its efforts in helping alleviate the European debt crisis as the primary reasons for the shift.

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iShares Launches First Bond Sector ETFs

Thu, 16 Feb 2012 10:14:12 +0000

Just when you thought the ETF providers couldn't slice and dice the markets any further, along come three new bond sector ETFs from iShares:

iShares Financials Sector Bond Fund (ticker:MONY)
iShares Industrials Sector Bond Fund (ENGN)
iShares Utilities Sector Bond Fund (AMPS)

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How to Reduce the National Debt

Tue, 14 Feb 2012 11:26:55 +0000

Everyone is looking for a way to reduce the national debt, and it turns out the answer was right under our noses all along. Believe it or not, the TreasuryDirect website offers every U.S. citizen the opportunity to make a tax-deductible donation to help alleviate the growing debt burden. In the interest of public service, the government has given us the option of writing a check, making a direct bank transfer, or using a credit card.

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Warren Buffett on Bonds

Mon, 13 Feb 2012 12:36:18 +0000

What's wrong with bonds? Everything, if you believe Warren Buffett. And although Buffett is best known for his stock investments, he remains the third-richest man in the world - and therefore a voice worth listening to.

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New Articles for February

Thu, 09 Feb 2012 21:07:27 +0000

February brought eight new articles to the About.com bonds page:

The Complete, Updated List of Bond ETFs - Get the full list of all bond ETFs currently available in the U.S. market, sorted by category.

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Best Fund Families for Bond Investors

Wed, 08 Feb 2012 11:23:34 +0000

Barron's has come out with its annual list of best fund families for 2011. Here were its winners in the taxable and tax-exempt bond categories:

Taxable Bond

GE Asset Management
State Farm Investment Management
Vanguard Group
Lord Abbett
Ivy Investment Management

Tax-Exempt Bond

TIAA-CREF
Affiliated Managers Group
USAA Investment Management
Legg Mason
Oppenheimer Funds

The Barron's scoring system is based on performance, assets under management, and fees.

Bond Market Returns - January 2012

Tue, 07 Feb 2012 09:48:28 +0000

The new year began on a high note, with strong returns across all segments of the bond market. While high-yield bonds topped the performance charts, municipal bonds, Treasuries, and TIPS, also delivered excellent gains. Here are January's results, by the numbers:

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Who Holds U.S. Debt?

Sun, 05 Feb 2012 10:55:28 +0000

According to the official U.S. Treasury website, TreasuryDirect.gov, the United States owed $15,351,406,294,640.49 to its creditors as of February 2. But who owns all of this debt? You may be surprised to find out that the largest holder is in fact the U.S. Federal Reserve, with over $6.3 trillion in government securities in its coffers. Through its various policies designed to bring down bond yields - including quantitative easing and Operation Twist - the Fed has seen its balance sheet balloon in recent years. China is the second-largest holder, with a position totaling more than $1.1 trillion.

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