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AWF-TLT

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AWF-TLT

por vset » 31/1/2009 16:42

What is AWF-TLT? It's a spread between a hybrid bond fund and a treasury ETF. It offers a chance to be long corporate bonds and short U.S. Treasuries! The corporate bond fund, AWF, is the AllianceBernstein Global High Income Fund traded on the New York Stock Exchange. TLT is a U.S. government bond ETF (Exchange Traded Fund -- the iShares Barclays 20+ U.S. Treasury Bond.)
There's a small catch to this trade. While you are in it, you will have to pay 3.5% per year in interest to cover the coupon payments on the bonds you are shorting. However, when paired with the AWF bonds' 15% yield, you have a net yield of about 11.5%. Bond traders call that a "positive carry." You will be paid to wait while the spread gives you the rest of the 50% in the form of capital gains. Why will you make such a huge gain? Because the outrageous gap between the two investment vehicles is bound to become narrower; in fact, it must become narrower.
Don't freak out and put all your money on this trade -- 10% of your portfolio will do, and use a trailing stop of 25% on each leg of the spread.


Mais uma estratégia diferente do que faço. Quem faz este tipo de produtos?


Cumprimentos.
 
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