Barron's Take On U.S. Treasuries
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Created by barrons3
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Date updated:05-16-2009

The bear market in Treasuries will worsen, because of a glut of government bonds. Instead, consider high-yielding mortgage securities and certain munis.

symbol name last price % change open
  • +
  • PTTAX
    Pimco Funds Total
  • $10.93
  • +0.09%
  • $N/A

"There are better values elsewhere among high-quality bonds," says Steve Rodosky, an executive vice president at Pimco, which runs the giant Pimco Total Return fund (PTTAX), the country's largest bond fund; it's besting its peers again this year, with a 4.8% return so far in 2009. Pimco's chief investment officer, Mohamed El-Erian, was blunt at year's end, saying, "Get out of Treasuries. They're very, very expensive."

People owning PTTAX also tend to own: FAGIXHYGTBTTGMNXTIPVFIIXVIPSX

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  • +
  • VFIIX
    Vanguard Gnma Fun
  • $10.79
  • +0.09%
  • $N/A

It's a tale of two markets in the mortgage-backed sector. There isn't much appeal in government-backed Ginnie Maes -- or in Freddie Mac and Fannie Mae securities, which carry an implicit federal backing. These securities yield just 4%. That means funds like the big Vanguard GNMA (VFIIX), now carrying a 4.3% yield, could have disappointing returns.

People owning VFIIX also tend to own: AGRALUAVBLSBPCCLI

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  • +
  • TGMNX
    Tcw Total Return
  • $10.54
  • +0.09%
  • $N/A

The riskier -- and more attractive -- part of the market is the so-called non-agency sector of home- and commercial-mortgage securities. These yields still can top 10%. Funds with exposure to the non-agency mortgage market include TCW Total Return (TGMNX), which has a current yield of 10%.

People owning TGMNX also tend to own: 1866767.IR2226035.IRTGCNXTGDNXTGFVXTGHNXTGIIX

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  • +
  • TBT
    Proshares Trust
  • $47.69
  • -0.27%
  • $47.59

One way to bet against the Treasury market is to buy the ProShares UltraShort Lehman 20+ Year Treasury ETF (TBT), which is designed to rise at twice the daily decline in the prices of in long-term Treasuries. This exchange-traded fund changes hands at around $50 a share, up from $40 at year's end.

People owning TBT also tend to own: BTANLYPAASSSRITEVAADPBNA

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  • +
  • VIPSX
    Vanguard Inflatio
  • $12.77
  • +0.24%
  • $N/A

Tips are still good, because they protect bond investors from what they fear most: inflation. Investors can play TIPS through the Vanguard Inflation-Protected Securities fund (VIPSX), or an exchange-traded fund, the iShares Barclays US Treasury Inflation Protected Securities fund (TIP).

People owning VIPSX also tend to own: VFISXVGSIXVGTSXVTSMXCOPVEXPXVIMSX

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  • +
  • TIP
    Ishares Barclays
  • $104.32
  • +0.25%
  • $104.24

Tips are still good, because they protect bond investors from what they fear most: inflation. Investors can play TIPS through the Vanguard Inflation-Protected Securities fund (VIPSX), or an exchange-traded fund, the iShares Barclays US Treasury Inflation Protected Securities fund (TIP).

People owning TIP also tend to own: EPIQJNJCUTDBCEEMEFAFXY

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  • +
  • HYG
    Ishares Iboxx Hy
  • $85.61
  • +0.09%
  • $85.47

There are myriad ways to play any rally in corporate-bond prices. Some investments that Barron's suggested earlier this year still look attractive, including exchange-traded funds such as the iShares iBoxx $ High-Yield Bond ETF (HYG), open-end funds like Fidelity Capital and Income (FAGIX) and a host of closed-end bond funds that trade at a substantial discount to their net asset value.

People owning HYG also tend to own: CATCOPEFVEWOEXIJPMNSC

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  • +
  • FAGIX
    Fidelity Capital
  • $8.20
  • 0.00%
  • $N/A

There are myriad ways to play any rally in corporate-bond prices. Some investments that Barron's suggested earlier this year still look attractive, including exchange-traded funds such as the iShares iBoxx $ High-Yield Bond ETF (HYG), open-end funds like Fidelity Capital and Income (FAGIX) and a host of closed-end bond funds that trade at a substantial discount to their net asset value.

People owning FAGIX also tend to own: BHSDGFDCINTCJHMNIMPX

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A. dude, i trust DB, as much as i trust
nancy pelosi....................... that
bank is the BIGGEST F$$$$$ manipulator!

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