Fixed Income
Today’s price sits at the 43.0th percentile of modeled fair value — 51% of modeled scenarios put fair value above the market.
- Median fair value
- 101.1
- Upside to median
- +1.1%
- Last close
- $71.22
- Confidence
- high
Return distributions, not point forecasts
Percentiles describe the spread of scenario outcomes under the stated method. The width of the range carries as much information as the midpoint.
One year
modeled- P90
- +13.5%
- P75
- +9.5%
- Median
- +5.6%
- P25
- +1.5%
- P10
- -3.5%
80% of modeled scenarios end positive.
Starting yield-to-maturity of approximately 5.25% plus roll-down, plus 20% convergence of the modeled fair-value gap over one year, with the return distribution generated from the same justified-yield-regime scenarios used for fair value. Scenario-implied beat probability is read off the modeled return distribution at the 4.35% one-year Treasury par-yield hurdle and is diagnostic only.
Three years, annualised
modeled- P90
- +9.5%
- P75
- +7.5%
- Median
- +5.5%
- P25
- +3.5%
- P10
- +1.5%
Starting yield-to-maturity held as the dominant anchor over a horizon close to the 5.8-year duration, plus roll-down, plus 45% convergence of the modeled fair-value gap spread across three years. Reinvestment at prevailing forward rates; no assumption of a return to the pre-2022 real-rate regime.
Against the Treasury hurdle
- 1y Treasury
- 4.35%
- Expected excess
- +1.3%
- Basis
- direct
A modeled 5.6% one-year median against the 4.35% one-year Treasury par yield leaves roughly 1.25 percentage points of expected edge for accepting 5.8 years of duration and modest investment-grade credit risk; the one-year Treasury carries materially less outcome uncertainty.
7 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| BND US Broad Bond Market | +0.4Somewhat cheap | 101.1 | $71.22 | +5.6% |
| SHY Short-Term US Treasuries | +0.2Fair | 100.4 | $81.37 | +4.6% |
| IEF Intermediate US Treasuries | +0.5Somewhat cheap | 101.4 | $91.01 | +5.9% |
| TLT Long-Term US Treasuries | +0.6Somewhat cheap | 102.2 | $80.87 | +6.4% |
| TIP Inflation-Protected Treasuries | +0.8Somewhat cheap | 102.5 | $105.84 | +6.0% |
| LQD Investment-Grade Corporate Bonds | +0.1Fair | 100.3 | $104.32 | +5.7% |
| HYG High-Yield Corporate Bonds | -0.7Somewhat expensive | 96.5 | $78.60 | +5.2% |