With Treasury Yields Near Record Lows, A Look At Hedging Proxy ETFs

MyPlanIQ submits:Treasuries were in a slump last week on improved economic fundamentals. As the economic recovery continues to solidify one must allow for the possibility that interest rates will rise further when adjusting their fixed-income portfolios. By examining the following trend score table for bond ETFs that represent various fixed income subclasses, one can gain some insights into the current fixed income market:

David Pinsen submits:The table below shows the costs, as of Thursday's close, for hedging 7 of 10 stocks that advanced on unusually heavy volume against greater-than-20% declines over the next several months using optimal puts. Comparisons

David Pinsen submits:The table below shows the costs, as of Friday's close, of hedging the most actively-traded (by dollar volume) New York Stock Exchange stocks against greater-than-20% declines over the next several months, using the optimal puts for that. Comparisons

MyPlanIQ submits:Last week painted a mixed picture for the fixed income market, with high yields and international inflation protected bonds again claiming the top two spots in our trend table. Long term government bonds and munis lagged the broader market. We think two major themes—durational risks of long term government bonds, inflation pressures in emerging markets—are in focus and would offer investors insights on how to navigate the bond market.

Add France to the list of eurozone countries with negative short-term interest rates. The Wall Street Journal reports France Joins Germany to Sell T-Bills At Negative Yield France joined a handful of euro-zone countries Monday in selling short-term debt at negative interest rates as investors seek alternatives to expensive German and Dutch debt.

By Eric Parnell:Long-term U.S. Treasuries currently have two key hurdles to overcome. Now, for those that have followed my past articles on Long-Term U.S. Treasuries, I am a firm advocate for the asset class for the following reasons.

By Sebastien Buttet: With the global economy currently facing a troika of threats - the European sovereign debt crisis, the slowdown of the U.S economy, and China hard landing - investors have sought the safety of U.S. Treasuries and pushed yield at record low levels. The yield on 10-year bond is hovering around 2% (TNX), while the yield on 30-year bond is around 3% (TYX).

David Pinsen submits:The table below shows the costs, as of Wednesday's close, of hedging each Dow component, and the Dow-tracking ETF (DIA), against greater-than-20% declines over the next several months, using the optimal puts for that. First, a reminder about what optimal puts mean in this context, why I've used 20% as a decline threshold. Optimal Puts