{5U}

Some Asset Managers Moving from Treasuries to Corporate Bonds

Hedge funds are reaching trying to push up performance so they can get above their high water marks from 2008.

They also have been restricting investors from withdrawing money.

This rally is all about long only asset managers and hedge funds chasing performance. The most crowded, highly shorted pieces of krap float up the hardest in this type of tape.


On Jan 06 04:53 PM mrfreddo wrote:

> Shorting Treasuries is getting to be a very popular call. Even I'm
> doing it and my timing was wrong 90% of the time last year. Oh well,
> its a new year eh?
>
> I agree with the theory that treasury yields have been depressed
> because of a rush by the fearful into the world's safest instrument.
> As the crisis ebbs, it makes sense that we will all venture out again
> into the world and move our money back to corporate bonds and stocks.
> Treasury rates will have to rise as corporate rates fall back into
> a more normal spread.
>
> Is this crisis over? Or have we just reached a temporary lull in
> the storm that is about to break out again in full fury?
>
> The Markets have been strangely calm. Have the hedge funds exhausted
> themselves finally in their orgy of forced selling?
>
> Using TBT to short treasuries means that I win if rates go up. That
> could be due to inflation or due to a recovery taking hold. But
> as we know, the timing of these things is part of the key to the
> equation. We could be nowhere near the end of the not just bad news,
> but increasingly scarier magnitudes of bad news.
>
> Which would mean continued flight to treasuries and low rates. Certainly
> the Fed will fight to keep rates low for as long as it takes to turn
> the housing market around.

Some Asset Managers Moving from Treasuries to Corporate Bonds

LQD maybe a bit long in the tooth but you can find better value in single name issues

The Morgan Stanley 4.75% 14 are still yielding 9%

In this socialist market, the PFF may make sense It is laden with govie favorites

us.ishares.com/product...

Still yields about 15%

Wells, Citi and USB comprise about 15% of the ETF

Uncle Sam wants credit spreads to tighten


On Jan 06 03:17 PM SteveTN wrote:

> I appreciate the article by Dr. Enke, BUT I think this article is
> a little tardy. How any successful money/hedge fund manager would
> still have funds in treasuries is beyond me. Conversely, they would
> have to be absolutely asleep not to have already purchased a lot
> of corporate bonds.
> I am currently shorting treasuries and have positions in LQD and
> AGG.

Corporate Bonds Haven’t Been This Cheap Since 1932

People are idiots.

They trade stocks but do not understand how to analyze across a company's capital structure and where the most attractive investment is from a risk/reward standpoint.

They look at a chart. That's about it.