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Alliancebernstein Income Fund Message Board

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  • friend_of_the_deceased friend_of_the_deceased Jul 1, 2011 12:54 AM Flag


    ACG owns a lot of treasuries and they are leveraged so they have lost about 1% of their NAV on the recent sell off in the treasury market.

    Consider this though: we have had a 29bp move so far in the 10yr this week. If GS is correct and the 10yr goes to 3.75% ACG will lose around 2% of its NAV. However they are selling at 6.37% discount to their 5 yr avg and they yield over 6%.

    Don't think it won't go down though if treasuries keep selling off. The market is kind of dumb sometimes. Just consider ACG a nice hedge against a portfolio of riskier assets like stocks and HY bonds and hang tough imo.

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    • I'm of the opinion that the Dems and Repubs will not settle their standoff on the debt limit until the very last minute. This puts more pressure on managers to sell government bond holdings for fear of being left "holding the bag" when the market takes the inevitable hit.

      I have been gradually selling most of my holdings and sitting in cash until things sort themselves out.
      I took a major slam in 2008 and at 67 years old, I don't have the luxury of time to recover from another major downturn.

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