 |
|
| View previous topic :: View next topic |
| Author |
T. Rowe Price on the Bond Market |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7642
Location: Houston, Texas & Los Angeles, California
|
 Posted: Sun Mar 02, 2008 4:45 am Post subject: T. Rowe Price on the Bond Market |
 |
|
http://online.barrons.com/article/SB120432864648204203.html?mod=b_hps_9_0001_b_this_weeks_magazine_home_right&page=sp
| Quote: | As the manager of the T. Rowe Price Tax Free Income Fund (ticker: PRTAX) since 1997, Miller has compiled a strong and consistent record. She now co-manages it with Konstantine Mallas. The fund, which invests exclusively in munis, places in the top 20% of its Morningstar peer group based on one-, three-, five- and 10-year returns. To their credit, Miller and her team have mostly avoided the minefields associated with subprime mortgages, collateralized debt obligations and structured investment vehicles, or SIVs.
.....
We are looking at the longer end of the yield curve. As of last week, long municipals bonds -- those with maturities more than 22 years out -- were down close to 3% this year. The yield for long insured municipal paper is close to 5%. As a tax-free investment, that's pretty attractive.
.....
That part of the market [CMBS] has underperformed severely in the first six to seven weeks of the year, with spreads recently at about 352 basis points over Treasuries. About half of that widening occurred this year. We are looking at the triple-A-rated top tranche of the commercial-mortgage-backed security market, which we think has plenty of downside protection. For one thing, lending standards there were never as lax as those in the subprime market.
.....
My sense is that the market has already built in a recession. Treasury yields at these levels -- and spreads at some of these levels -- are really baking in a worst case. If someone announced that we are in a recession three months from now, I don't know that I would do anything differently.
.....
We are underweight in Treasuries, which we don't think have much upside right now, and we are neutral on agency debt. We have overweighted commercial-mortgage-backed securities in our taxable portfolios, and we are buying municipal bonds, even in taxable portfolios, because we think they are cheap relative to taxable alternatives. Where we can, we have exposure to emerging markets, both high-yield and investment-grade, in non-dollar-denominated debt because it's an excellent way to diversify. We don't see the dollar weakening a lot more, but there are many opportunities in higher-yielding credits in other economies, including Brazil and Turkey, that give us different exposure and risk. |
|
|
| Back to top |
|
 |
| Author |
T. Rowe Price on the Bond Market Replies |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 7530
Location: Sunny California
|
| Posted: Sun Mar 02, 2008 7:42 am Post subject: |
|
|
Brazil and Turkey....sounds like she's sticking with the partner that brung her. Inflation has always been comfortable here. I hope she's keeping an eye on Argentina for direction (back?).
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
Powered by phpBB
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
