Wells Fargo said that today’s stable returns will not only provide investors with income, but they may also be transformed into higher total returns in the future. Because the yield and price of bonds have the opposite relationship, the idea of some investors may violate intuition. When the yield rose, bond prices fell. When the output decreases, bond prices rose. Total return measures the income of bond payment and any capital income or loss of price increases or declines. Today, the 10 -year fiscal yield hovering at about 4.55 %, which is higher than the 3.6 % level in September. Brian Rehling, the global head of the bank, said that Wells Fargo’s total return on Bloomberg has been the total return since the late 1970s, showing that the start or current yield is the future of the index return. Very powerful indicators. Fixed income strategy. He pointed out that the strongest correlation with the initial yield level is close to the average yield of five years, so the higher the yield, the better the return during the five -year period. He wrote in a bill last week: “This analysis means that as the yield increases recently, fixed income investors may get a higher return than the nearest income in the future.” A story, and the correlation with performance is very important. He explained that in the past year, the total ETF of the AGG 1Y Mountain Ishares Core US has greatly improved, and the revenue or yield of new buyers is much higher, which provides a lot of buffer. Rehling told CNBC: “Even if the interest rate is increased a little, you can still make money. If the interest rate decreases, you make money.” Of course, history does not necessarily indicate the results of the future. When investors evaluate yields and returns, multiple factors should be considered. Where to invest in re-investing, you can see the steep income curve of the opportunity in the middle of the curve-five to seven years of expiration can increase the yield. Despite the tension, he especially likes investment -level corporate bonds. Differential measures to measure the differences between the yield between the state treasury and other maturity of fixed income assets. Rehling also likes municipal bonds, especially for investors with higher tax rates. The interest obtained by municipal bonds is free of federal taxes. If investors and issuers are in the same state, they can be exempted from state and local taxes. He said that as long as the economy is in good condition, the Mundi market will do well. “We think the economy is in a good position.” Although we admit that there may be better entry points later this year. Lehirin said that although the rise in yields can better position investors as future returns, bonds should not only focus on the total return. He said: “Fixed income holdings can play an important role in many investment portfolios by providing investors with diversified, reducing fluctuations and providing liquidity.”
Wells Fargo said that the transfer of the bond market may mean a higher future return | Real Time Headlines
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