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Bond Rotation

The bond rotation strategy is a moderately aggressive bond investing strategy. It buys the bond sectors that have performed well recently. Buying momentum has been a rewarding strategy in the past.

How should the Bond Rotation Strategy be used?

This bond investing strategy is a good choice for an aggressive bond portfolio. It is not intended to be a replacement for the core bond allocation of an investor's portfolio, but would be a complementary allocation to enhance returns and add diversification. We think that the best way to use this strategy is to buy the top two or three ETFs each month.

Bond Sector Rotation

Market/Sector ETF ETF Ticker Rank Sum 13 Wk 26 Wk 52 Wk
Emerging Market Bonds iShares JPMorgan USD Emerging Markets Bond ETF EMB 1 23.8 3.7 8.1 12
High Yield Bonds SPDR Barclays High Yield Bond ETF JNK 2 20.8 2.3 5.5 13.1
International Government Bonds SPDR Barclays International Treasury Bond ETF BWX 3 19.5 2.5 6.3 10.7
Treasury Notes iShares 7-10 Year Treasury Bond ETF IEF 4 9.3 1.4 4 3.9
Short Term Corporate Bonds iShares 1-3 Year Credit Bond ETF CSJ 5 3 0.4 0.6 2
Short Term Treasuries iShares 1-3 Year Treasury Bond ETF SHY 6 0.9 0.1 0.2 0.6

As of: July 5, 2014