AltaVista Research Debuts Fixed-Income ETF Analysis
AltaVista Research was founded in 2004, as a means of providing expanded research and coverage of the exchange-traded fund universe.
The firm takes a unique approach to analyzing fundamental aspects of ETFs that help financial advisors and sophisticated investors make portfolio management decisions.
To build upon the success of their equity ETF research, AltaVista has now launched coverage of fixed-income ETFs as well. The goal of this new initiative is to help prepare investors for the specter of rising interest rates and help them understand the impact on some of the largest bond ETFs.
At debut, this new fixed-income research covers 30 ETFs across six categories with nearly $200 billion in total assets. The quick view shows important information such as current yield, yield to maturity, duration and a proprietary ALTAR score.
ALTAR stands for AltaVista Long Term Annual Return, and it is designed to summarize the results of their fundamentally-driven analysis. The goal of this rating is to steer investors toward undervalued areas of the market rather than chasing overheated sectors.
“As with equity ETFs, we conduct a fundamental analysis of each fund’s underlying constituents," explains Michael Krause, president and founder of AltaVista Research.
"For fixed income funds, this allows us to estimate, for example, 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," he continues. "We think this information is quite useful to financial advisors trying to position clients’ portfolios for an eventual increase in interest rates."
Some of the most prominent fixed-income ETFs included in the expanded research center are the Vanguard Total Bond Market ETF (NYSE: BND), SPDR Barclays High Yield Corporate Bond ETF (NYSE: JNK) and iShares 20+ Year Treasury Bond ETF (NYSE: TLT).
Navigating the complexities of credit quality, duration and yield are critical aspects of generating long-term value in bonds, as the Fed reels in its quantitative easing efforts this year.
This new objective research can help guide fixed-income investors as market conditions evolve.
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