Apr 19
Source: RBA The above chart shows that bond yields shows that after bond yields reached a high around 1 month ago they have declined across all terms by around 50bps. That means that most of the traditional bond funds would have produced capital gains of around 2% over that last month (because the duration od …
Apr 02
Source: RBA In less than two weeks the yield curve managed to drop around 15bps back to levels similar to those of late January. This is despite slightly stronger equity markets, the ASX200 made it through the 4,300 barrier for the first time in many months, and not that much in the way of really bad news…I …
Mar 28
Source: van Eyk The above chart shows the 12 month correlation of monthly returns between the UBS Composite index (representing Australian Fixed Interest) and the total return of the S&P/ASX All Ordinaries index (Australian shares). As you can see the correlation between both asset classes is extremely variable and the trendline shows that over the last …
Mar 20
Well…not normal yet. The shorter part of the curve suggests the market is expecting another two 25bps cuts by the RBA but with the Euro sovereign crisis well and truly looking much better its highly unlikely there’ll be any cuts soon. Whilst there’s plenty of evidence that shows the Euro sovereign crisis has improved, nothing …
Mar 10
The SPIVA report was released a few days ago and as I’ve mentioend before it is my favourite assessment of the success of fund managers because it takes into consideration survivorship bias…in other words, if you want to know who are the best fund managers over the last year, then you start with all fund …
Mar 06
Source: RBA I know the above chart is a couple of days old but there’s not much change since last Thursday. At its simplest what it shows is that the bond market is still expecting the Reserve Bank to decrease interest rates some time during the year…with 1 year bond yields at less than 4%, …
Feb 20
A look at the average returns of bonds over the last 30 years does not suggest that equity returns have really been worth the risk. Table 1 shows the returns on Australian Bonds (Aust Comm Bank All Series/All Maturities) versus the accumulated return of the Australian sharemarket (S&P/ASX 200 TR) and whilst equities have the better performance …
Feb 09
When I saw the headline in the Market section of today’s Australian Financial Review I thought bond yields must have gone through the roof but the above chart shows that there ‘s only a relatively small increase compared to a couple of weeks ago. Markets had obviously priced in a rate decrease from the Reserve …
Feb 07
I was just reading the latest riveting story on bonds in this month’s Asset magazine and I feel compelled to share an example of misinformation that tends to annoy me a little (I know its probably a little pathetic but anyway)…John O’Brien, van Eyk – Head of Research, apparently said that many of the great …
Jan 29
Source: RBA Its been a few weeks since I provided an update on the local government yield curve and consistent with the slight improvement in the sharemarket the Australian Government Bond Yield Curve has indicated a better outlook for the local economy. As the chart shows, since 6 January the yield curve has increased around …