Fixed Income
Today’s price sits at the 44.5th percentile of modeled fair value — 56% of modeled scenarios put fair value above the market.
- Median fair value
- 100.9
- Upside to median
- +0.9%
- Last close
- $69.88
- 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
- +11.8%
- P75
- +8.5%
- Median
- +5.9%
- P25
- +2.5%
- P10
- -1.5%
84% of modeled scenarios end positive.
Carry plus duration-driven price change. Starting yield to worst of 5.54% is the central carry term; the one-year distribution is generated from a yield-change range of roughly plus 130 to minus 105 basis points applied through a 5.7-year duration and a convexity term of 45, with a small positive contribution from partial convergence toward the modelled median fair-value index of 100.9. Credit-spread widening from today's 87bp investment-grade level is embedded in the lower quantiles. No calibrated probability is published; the scenario-implied beat probability is diagnostic only.
Three years, annualised
modeled- P90
- +8.0%
- P75
- +6.8%
- Median
- +5.6%
- P25
- +4.4%
- P10
- +3.0%
Starting yield to worst dominates over a holding period roughly half the 8.3-year average effective maturity, so the three-year annualised distribution is centred close to the 5.54% entry yield with the dispersion narrowed relative to one year by coupon reinvestment and the pull of prices toward par. Vanguard's VCMM ten-year US aggregate bond range is used only as an unconditional sanity check.
Against the Treasury hurdle
- 1y Treasury
- 4.58%
- Modeled excess
- +1.3%
- Basis
- direct
A 5.54% yield to worst on a 69% government-quality portfolio against a 4.58% one-year Treasury par yield is a modelled annual edge of roughly 1.3 percentage points, paid for with 5.7 years of duration risk. On a risk-adjusted basis the one-year Treasury remains genuinely competitive.
7 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| BND US Broad Bond Market | +0.3Fair | 100.9 | $69.88 | +5.9% |
| TLT Long-Term US Treasuries | —Unavailable | — | $77.11 | — |
| LQD Investment-Grade Corporate Bonds | —Unavailable | — | $101.83 | — |
| HYG High-Yield Corporate Bonds | —Unavailable | — | $76.98 | — |
| IEF Intermediate US Treasuries | —Unavailable | — | $88.92 | — |
| SHY Short-Term US Treasuries | —Unavailable | — | $81.08 | — |
| TIP Inflation-Protected Treasuries | —Unavailable | — | $103.98 | — |