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...Bond fund giant Pimco is holding a smaller than usual position in US Treasuries and prefers the bonds of countries such as the UK and Canada, as it believes inflationary pressures may lead the Federal Reserve...
...to a default on the holding company’s bonds....
...The book suggests that the annualised long-run returns for the major asset classes are 8 per cent for stocks, 5 per cent for bonds, 4 per cent for Treasury Bills, and 2 per cent for gold....
...Gold makes no yield, so it benefits from a reduction in interest rates, which dims the allure of bonds to investors....
...Company....
...In commodity markets, gold hit a fresh record high on the first day of the second quarter, extending a multi-month rally....
...and bonds....
...At the same time, the size of the bond market has ballooned, because of government deficits and more companies turning to fixed-income markets to borrow (also partly because of tougher regs on banks)....
...Gold, an asset with no yield, benefits from lower borrowing costs as investors feel they have not missed out so much by not putting their cash into bonds....
...bonds....
...Block, the payments company, issued $2bn worth of bonds in an upsized deal....
...“Chinese speculators have really grabbed gold by the throat,” said John Reade, chief market strategist at the World Gold Council, an industry body....
...At the same time, the gold bugs and fiscal crisis enthusiasts come out of the woodwork, putting a cap on broader enthusiasm for risky assets....
...Bernard Dahdah, senior commodities analyst at French bank Natixis, said the modest recent moves in the dollar and bond yields and continued outflows for ETFs had made it hard to pin gold’s rally on changing...
...About $2.6tn of green bonds have been issued by countries and companies all over the world....
...The yield on the two-year Treasury was up 0.14 percentage points to 4.35 per cent. The yield on the 10-year bond rose 0.04 percentage points to 4.11 per cent....
...Should the gold price continue its ascent, talk of deal activity will only grow. Shareholders, wary of overpaying for growth, would prefer companies to mine the market for cheap assets first....
...A default in the private utility’s parent company Kemble has leaked through to what were thought to be “gold standard” bonds securitised at Thames Water’s regulated operating companies....
...company....
...Chedid compared gold to value stocks, in that both tended to draw money during inflationary periods, but was nevertheless surprised by the unpopularity of gold ETPs, given the price rose 13 per cent last...
...That added risk not only for bondholders but also for investors in companies reliant on bonds....
...Abundant cash flows make highly geared companies less scary. Buying these bonds is also morally right....
...The violence in the Middle East has reversed gold’s recent slide, as rising bond yields pushed the yellow metal to $1,820 per troy ounce....
...This is what happened to Executive Life, then the largest insurer in California, in the early 1990s: policyholders withdrew $4bn after the company announced losses from junk bond investments, and the company...
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