Investing in the U.S. Corporate Bond Market From an Asian Perspective
Fixed Income, Investment Management, Investor Education
Country or region:
Asia Pacific (Overall), Japan
As Asian market participants have become more aware of the importance of portfolio diversification, they have been paying more attention to the U.S. corporate bond market.
Reference URL: http://www.indexologyblog.com/2017/12/27/investing-in-the-u-s-bond-market-from-an-asian-perspective/
As Asian market participants have become more aware of the importance of portfolio diversification, they have been paying more attention to the U.S. corporate bond market. The S&P 500 Bond Index seeks to measure the broad and relatively liquid U.S. corporate bond market, and it is designed to be a corporate-bond counterpart to the iconic S&P 500, widely regarded as the best single gauge of large-cap U.S. equities. In addition to the popularity of the equity index, Asian market participants should be familiar with some of the index constituents like Apple, JPMorgan Chase, Microsoft, and Wal-Mart.
Since 90% of the index is made up of investment-grade debt from blue-chip companies, it can be viewed as a proxy for the U.S. investment-grade bond market. As of Dec. 26, 2017, the index delivered a YTD total return of 5.52%, while its yield-to-maturity tightened 5 bps to 3.32%.
The S&P 500 Bond Index market value is larger than China’s and Japan’s corporate bond markets; it’s even larger than the sum of all Pan Asia local currency corporate bond markets. The S&P 500 Bond Index currently tracks over 5,000 constituents with a combined market value of USD 4.6 trillion.
Over the past decade, the S&P 500 Bond Index rose 5.66% annually; it outperformed the S&P Pan Asia Corporate Bond Index and the S&P Japan Corporate Bond Index, which gained 4.15% and 1.36%, respectively, in the same period.
Hence, the S&P 500 Bond Index could offer Asian market participants the benefits of familiarity, good returns, and stable yields.
Date of original publication:
Total Views: 545
Total Downloads: 0
No comments made on this post yet
If you have any copyright and other associated infringements related to this item, please click on the Terms and Conditions link where you will be directed to the Digital Millennium Copyright Act (DCMA) that will outline the procedure for raising your concern.
If you have any concerns with the content of the item [e.g., offensive language and/or material, inappropriate material] then please proceed to utilize the Contact Us form. Remember that when using the Contact Us form, please ensure you reference/cite clearly the item in question (e.g., name of article, author(s) of article) and the nature of the complaint.