The Japanese apartment. Shibuya, Tokyo, Japan. Copyright © 2018 Felix Choo / dingobear photography. Picture available for licensing at Alamy Images. Visit my online store for prints at Fine Art America. Photo may not be reproduced without permission.
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Here's your monthly review on the performance of the Peanut Convertible Debentures Index™, the leading (in our humble opinion!) convertible debentures index in Canada. For more background on the index, please click here.
Important disclaimers: Like everything else on this website, content here is provided as information and opinions only and not intended to be a provision of investment advice or a recommendation of any investment action in any form. There is no guarantee, warranty, representation, or other assurance whatsoever on any of the information provided. Information and opinions reflect our views as of the date provided, but may change without notice. Investments made in convertible debentures are exposed to the risk of financial losses, and as with all disseminated information concerning investments, it is highly recommended that an individual consult with a qualified investment professional before making any investment decisions.
Peanut Convertible Debentures Index™ (January 2020 Review)
January was a loaded month. For instance, consider: assassination, impeachment, acquittal, pandemic, Brexit. And through it all, both bonds and stocks surged higher. Conventional wisdom suggests that both can't be right. For bonds, how much lower can rates go? (My take: I don't know, but it can definitely get lower than here.) For stocks, liquidity is everywhere and central banks are more accommodating than the Holiday Inn, can they continue to run? (My take: well yes, because markets can be exuberant and irrationally so for extended periods, but let's not kid ourselves, valuations are extended for current fundamentals). Bottom line: don't go chasing and emphasize quality and diversification.
In this environment, Canadian convertible debentures continued to run. The Peanut Convertible Debentures Index™ stepped up 1.33% higher during the month, and is up 12.71% in the last 12 months. The latter figure exceeds the return of FTSE TMX Canada Convertible Bond Index™ by 465 basis points or 4.65%.
The Peanut Index has also exceeded the return of the iShares Convertible Bond ETF (ticker: CVD) by 518 basis points and the CI First Asset Convertible Bond ETF (CXF) by 38 basis points over the last year.
Please click on the table below for a more complete return comparison. Pro tip: if you still find the table below too small to read after clicking on it, please simply download the PNG file, which then can be zoomed to a size that you prefer ... or, alternatively, you can try zooming in with your browser menu.
If you're a regular reader of this blog, you are probably already aware that we update the Peanut Convertible Debentures Index™ levels and daily percentage changes on a frequent basis in the dedicated widget on the right sidebar for desktop users and the Peanut Convertible Debentures Index™ page for both desktop and mobile users.
We will try to do another performance update post in about a month's time. Until then, good luck with your convertible debenture (and other) investing.
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