InvestmentsAug 6 2014

Comparing bond funds

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AltaVista Research has launched a fixed income exchange-traded fund coverage tool to help investors and IFAs compare bond funds, as well as position their portfolios for potential interest rate increases.

Beyond basic fund information, such as issuer breakdown, credit quality and performance, AltaVista’s fixed income ETF coverage includes rate sensitivity analysis and default-adjusted yield to maturity, which helps investors determine whether they are being adequately compensated for higher risks of lower-credit quality issues.

The launch of coverage includes 30 of the most widely held bond funds across six categories, together with existing coverage of equity funds. Subscribers can screen, analyse and construct portfolios from among 835 ETFs, with more than $1.5 trillion (£883m) in assets.

Michael Krause, president and founder of AltaVista Research, said: “For fixed income funds, this allows us to estimate, for instance, the likely change in a fund’s price in response to changes in interest rates, based on the duration and convexity of each security in the fund. We think this information is quite useful to financial advisers trying to position clients’ portfolios for an eventual increase in interest rates.”

Adviser view: Colin Rodger, director of Glasgow-based Alexander Sloan Financial Planning, said: “It looks like a very useful research tool with comprehensive analysis of the sector. For smaller independent advisers, in particular, without research departments to draw on this service could be very helpful.”