Survey Of Technical Condition And Portfolio Attributes Of Key Bond Fund Types

There may seem to be a bewildering array of bond fund types. This survey of key bond types may help you chose which if any are appropriate for your particular circumstances and portfolio.

We looked at 24 types of bond funds in terms of price chart slope:

We included a preferred stocks ETF in the list of “bond” funds. because preferred stocks can be arguably said to be closer to bonds than to common equity in their characteristics; and in this period of very low interest rates preferred stocks have been adopted by many investors as bond substitutes in the search for yield.

Figure 1: Technical Condition of Key Bond Fund Types

The most basic form of chart analysis is a binary determination — is the  slope of the price pattern is UP or NOT

Figure 1 below includes 6 binary Yes/No (1/0) measurements of the slope of the price chart as of Friday April 10, 2015 (from most important on top of list and least important on bottom of list):

  • 12 mo direction (is the 12 month average now higher than 10 days ago? Y/N)
  • 3 month av / 12 mo av (is the 3 month average above the 12 mo average? Y/N)
  • 3 mo direction (is the 3 month average now higher than 10 days ago? Y/N)
  • 1 mo / 3 mo (is the 1 month average now higher than 10 days ago? Y/N)
  • 1 mo direction (is the 1 month average above the 3 month average? Y/N)
  • Price / 1 mo (is the last price above the 1 month average? Y/N)

We have highlighted those with all 6 binary answers as Yes (1) with a bold border.  Of the 24 (as of Friday April 10, 2015), 13 of the 24 has a “perfect” 6 binary YES (1) slope ratings:

BND, BSV, BIV, VGSH, VGIT, VCSH, VCIT, VWIUX, VWLTX, VWAHX, BNDX, VMBS, PFF

Figure 1 also presents 4 other chart price pattern attributes:  12 mo, 3 mo and 1 mo Z-scores (number of standard deviations the price is from the corresponding moving average price); and the 14-day money flow index (a volume weighted version of the relative strength index — itself a measure of the tendency of the price to position itself within its average daily range).

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