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Sunday, March 9, 2014

Compare 4 Bond Funds in 15 Minutes (or less) you're facing a choice of several bond funds, and you're not sure how to proceed.  You know that duration is important and you've checked that at


You know that yield is related to duration and quality of holdings - that higher quality means lower yield.

You know that price and yield are inversly related - that an increase in yield is the flip side of a decrease in bond prices.

Still - how have bond funds performed?  Reflecting on this a bit, you realize that last year saw an increase in yields; so it could be an indicator of future performance if you believe that yields will continue to rise.  To see the 12-month change in yields, you can go to


and find:

Source: Bloomberg
As you can see, the benchmark 10-year Treasury Note increased in yield by 75 basis points from 2.04% to 2.79% over the past 12 months.

Again, as noted above, bond prices fall in this kind of environment.

Assume we are considering 4 bond funds:  AGG (benchmark Barclay's Aggregate Bond Index), CSJ (short duration corporate bond fund), HYS (short duration high yield bond fund), and JNK (long duration high yield fund).  In particular, we are interested in how the funds performed over the past 12 months.  Aside: if you need a list of bond ETFs, go to

Bond ETF List .

OK ...we're ready to roll.  Start the 15-minute clock.

Go to

Yahoo! Finance 

Find the quote box on the left hand side, put in your first fund's ticker symbol AGG, and click "Go." Find the graph on the right hand side and click 1 yr:

Source: Yahoo

Find the Compare link (see below) and put in the ticker symbols of the funds you want to compare.  You'll note that you get drop-down lists when you put in the symbols, and you need to carefully select the right funds!

What you end up with, in the Yahoo! graph, is the percentage change in the price of the funds - not the total returns.  To get total returns you can go to the Morningstar site and find performance data.

As expected, AGG with its lower yields and relatively higher duration had the biggest negative price change at slightly more than -2%.  The best performer was the short duration, high yield fund HYS.

One point to note is that the price of CSJ was fairly stable over the year.  It has a yield of 1.14% (pretty hefty compared to today's money market rates).  It is the type of fund that yield seekers who can withstand some price volatility find attractive.

So, my challenge to you:  pick 4 funds (can even be stock funds!) and see if you can get a quick picture in under 15 minutes.  If so, then you are on your way to becoming  the Rachel Ray of the investing world ;)

Disclosure:  Past performance is not necessarily indicative of future performance.  This post is for educational purposes and investors should do their own research or consult a professional before making investment decisions.  Some of the funds mentioned are held by me and my clients.