30 year interest rate (^TYX) vs TLT
Posted: Wed Nov 26, 2014 3:29 pm
was just looking at (^TYX) vs TLT over various times from 1 month to 10 years (yahoo finance)....seems like the more recent times TLT is under performing relative to the long term inverse relationship? When I say underperforming...I'm really pointing out the the interest rate has moved further than TLT at shorter time lines. I suppose this also is apparent if holding the bonds directly?
It seems this is the opposite of what had been expected on other threads where concerns raised about the performance of TLT/bonds at low interest rates...the reply being convexity(?) would mean the bonds would appreciate more than enough if rates fell further...if I'm properly conveying the argument.
I'm not concerned about the overall performance of the PP, but I thought it an interesting observation and wonder about what might this mean.
It seems this is the opposite of what had been expected on other threads where concerns raised about the performance of TLT/bonds at low interest rates...the reply being convexity(?) would mean the bonds would appreciate more than enough if rates fell further...if I'm properly conveying the argument.
I'm not concerned about the overall performance of the PP, but I thought it an interesting observation and wonder about what might this mean.