Bonding Exercises

Get familiar with the principles of fixed income investing.

  • Fixed Income Investing

    Fixed-income securities are a mainstay of investor portfolios. While they come in many shapes and sizes, bonds and other fixed-income securities are simple in principle—they’re loans from the investing public to an institution that needs money.

  • Fixed Income ETPs: The Basics

    Fixed income is an important component of most diversified portfolios, and fixed-income ETPs can be a great vehicle for accessing that exposure. Like equity ETPs, fixed-income ETPs offer exposure to a basket of securities that, in this case, is a basket of bonds. Fixed-income ETPs target all corners of the market from speculative emerging markets debt to top-notch US government debt.

  • Understanding Credit Quality and Issuers

    Bond investors should keep something in mind: when you lend money to someone, it’s nice to get it back. That’s the simple premise behind understanding credit quality in the world of fixed-income investing. As an investor, it’s important to assess the likelihood that the debt you’ve purchased from a corporation or government will actually be paid back—in full, and on time.

  • Understanding Interest Rate Risks

    “Bond prices go down when interest rates go up”. That’s the oft-repeated maxim in fixed-income investing, and mathematically, all else equal, it’s true. But prices for some bonds fall more than others given the exact same change in interest rates.

  • Understanding Duration

    It’s hard to talk about fixed-income investing without talking about interest rates—after all, yield is the whole point of most fixed-income strategies. And you can’t talk about interest rates without mentioning duration.

  • Fixed Income Indices

    The first step in understanding a bond index is the broad class of its issuer exposure. Some indices focus on bonds issued by corporations; others list the debt issued by governments (also known as sovereign debt); and broad indices exist that cast their net wide to include both of these. Some indices narrow their scope within the broad categories—for example, an index of inflation-protected bonds issued by a single government.