Presented below is a summary of the 26 bond recommendations that we have made to our clients over the last 12 months, from June 2013 through May 2014. The yields shown below are when these securities were added to our FX1,FX2, and/or FX3 Fixed Income portfolios, and they average 9.81%.
Nineteen of these global corporate debt instruments were Yankee bonds (foreign corporation debt denominated in US dollars), with nine in other currencies, including Canadian dollars, Swedish krona, Brazilian real, and Russian rubles.
Each summary that follows lists the issuer, coupon rate, maturity, credit rating, the yields obtained at the time of acquisition, the portfolio (FX1, F2, or FX3) each was added to, as well as the business sector and a brief recap of the reason for its selection. Many of the companies hold prominent or even dominant positions within their respective countries. It is not uncommon, however, to find credit ratings that are constrained by a national sovereign credit rating.
- 19 US dollar debt additions, averaging 10.25% yield, were made to FX1.
- 26 mixed currency debt additions, averaging 9.81% yield, were made to FX2.
- 7 foreign currency debt additions, averaging 8.61% yield, were made to FX3.
The bonds in the portfolios have an average outstanding maturity of under 40 months (3 years, 4 months) at an overall indicated average net yield of 9.81%. More »
We have identified a medium term A- rated Morgan Stanley bond denominated in the Brazilian real and are targeting a better than 10.50% yield for our clients.
The global bond market offers US-based investors the opportunity to add both higher yields and diversity to their fixed income portfolios. With current US Treasuries and Bank CD’s yielding returns that are lower than than even the current inflation rate, income investors are increasingly being forced to either continue losing buying power “safely,” or to hunt for alternate (added risk) fixed income investments in a jungle of choices. When you add together the US dollar’s declining value against other currencies and the Federal Reserves tremendous increase of money supply, mix in the friction and fighting by both political parties over what should be agreed upon as a “workable plan” to start addressing this nation’s large and growing debt woes, here at Durig Capital we have good reason to believe that acquiring global debt instruments with significantly higher yields may be a vital ingredient to help reduce risk by providing some unique diversification while being likely to greatly enhance fixed income cash flow. This is especially applicable if all of a person’s net worth (i.e., their income, business, home, car, etc.) is based solely in US currency.
A new Sovereign Fiscal Responsibility Index has been established by the Stanford Institute for Economic Policy and Research, at Stanford University. With the recent financial crises and escalating deficits, with the many issues of fiscal responsibility of countries, Stanford created a Sovereign Fiscally responsible Index (SFRI). Many people want to know how many global countries compared to their peers. The study measured government in 5 areas Fiscal Space, Path, Rules, Transparency and enforceability. The country rankings and our bonds placements are believe the complete study is available here. The rankings are: More »