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2 pages/≈550 words
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-1
Style:
MLA
Subject:
Business & Marketing
Type:
Essay
Language:
English (U.S.)
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MS Word
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Topic:
Compare and Contrast EFT's. Business & Marketing Essay
Essay Instructions:
Find the fact sheets for the following three funds:
HYG Ishares ETF
AGG Ishares ETF
PIMCO Total Return Fund
Write a short (less than two pages, doubled space) report comparing and contrasting the three funds. I am purposely not telling you what components or attributes of the funds I want you to focus on.
But here is a hint: We talked about credit, rates, and negatively convex investments.
You DO NOT need to include the fact sheets. Just turn in your report.
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Compare and Contrast EFTs
HYG Ishares ETF can be comparatively attractive for investment because they pay relatively higher returns in interest rates than investment-grade bonds. However, PIMCO Total Return Funds have over three decades of the established legacy of delivering attractive total returns and outperformance across different interest rates and market environments (Mather, p.2). On the contrary, index-based AGG Ishares ETF, which trails the Barclays United States Aggregate Higher Yield Index. AGGY has a 30-days current yield of 2.23 percent, which is comparatively the lowest of the three. However, the AGG Ishares ETF fund is the second best-performer of all the five ETFs and records again approximately 8.2 percent year to date (BlackRock, p.3).
On the other hand, high-yield bonds are riskier bonds in the investment portfolio because they carry substantial defaulting chances than AGG and PIMCO investment-grade bonds (BlackRock Inc., p.2). According to Matthew Johnston, entrepreneurs seeking to invest and benefit from high return on their capital investment of high-yield bonds and control risks through diversification should invest in a pool of HYG bonds present in ETFs. Similarly, AGG is a superb core investment-grade approach (p. 1). It presents a conservative platform, and one sports one of the lowest outflow ratios in Morningstar's intermediate core bond categories. AGG Ishares ETF has a Silver Morningstar analyst rating. Additionally, the AGG Ishares ETF's index is measured by market value, slanting the platform towards the most liquid and largest issues, which are cheap to trade and easy to obtain. On the other hand, the PIMCO Total Return Fund can be actively managed and controlled through a risk-focused strategy to conserve capital while looking to provide an attractive total return (Mather, p.2). PIMCO Total Return Fund has substantial flexibility and can be invested across a set of global opportunities to preserve capital and mitigate risk and provide opportunities amid various economic times.
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Professor's Name:
Affiliated Institution:
Course Code:
Submission Date:
Compare and Contrast EFTs
HYG Ishares ETF can be comparatively attractive for investment because they pay relatively higher returns in interest rates than investment-grade bonds. However, PIMCO Total Return Funds have over three decades of the established legacy of delivering attractive total returns and outperformance across different interest rates and market environments (Mather, p.2). On the contrary, index-based AGG Ishares ETF, which trails the Barclays United States Aggregate Higher Yield Index. AGGY has a 30-days current yield of 2.23 percent, which is comparatively the lowest of the three. However, the AGG Ishares ETF fund is the second best-performer of all the five ETFs and records again approximately 8.2 percent year to date (BlackRock, p.3).
On the other hand, high-yield bonds are riskier bonds in the investment portfolio because they carry substantial defaulting chances than AGG and PIMCO investment-grade bonds (BlackRock Inc., p.2). According to Matthew Johnston, entrepreneurs seeking to invest and benefit from high return on their capital investment of high-yield bonds and control risks through diversification should invest in a pool of HYG bonds present in ETFs. Similarly, AGG is a superb core investment-grade approach (p. 1). It presents a conservative platform, and one sports one of the lowest outflow ratios in Morningstar's intermediate core bond categories. AGG Ishares ETF has a Silver Morningstar analyst rating. Additionally, the AGG Ishares ETF's index is measured by market value, slanting the platform towards the most liquid and largest issues, which are cheap to trade and easy to obtain. On the other hand, the PIMCO Total Return Fund can be actively managed and controlled through a risk-focused strategy to conserve capital while looking to provide an attractive total return (Mather, p.2). PIMCO Total Return Fund has substantial flexibility and can be invested across a set of global opportunities to preserve capital and mitigate risk and provide opportunities amid various economic times.
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