Fixed Income
Today’s price sits at the 53.0th percentile of modeled fair value — 47% of modeled scenarios put fair value above the market.
- Median fair value
- 99.6
- Upside to median
- -0.4%
- Last close
- $70.22
- 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
- +13.0%
- P75
- +9.0%
- Median
- +5.3%
- P25
- +1.5%
- P10
- -3.0%
80% of modeled scenarios end positive.
Starting portfolio yield of roughly 5.45% is the dominant anchor, adjusted for roll down the curve and for a price change equal to the estimated 6.0-year duration applied to the modeled change in yield. The tails correspond to roughly a 140 basis point yield rise and a 125 basis point rally.
Three years, annualised
modeled- P90
- +8.8%
- P75
- +7.2%
- Median
- +5.5%
- P25
- +3.8%
- P10
- +1.5%
Over three years the starting yield dominates and the duration effect partially washes out through reinvestment, which compresses the distribution relative to the one-year horizon. A partial decline in real yields toward equilibrium is assumed rather than full reversion.
Against the Treasury hurdle
- 1y Treasury
- 4.44%
- Modeled excess
- +0.9%
- Basis
- direct
The modeled one-year median of 5.3% exceeds the 4.44% one-year Treasury par yield by roughly nine tenths of a percentage point, but that edge is earned by accepting about six years of duration risk. A one-year Treasury delivers 4.44% with no duration and no credit exposure, so the compensation for extending is thin by historical standards.
7 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| BND US Broad Bond Market | -0.2Fair | 99.6 | $70.22 | +5.3% |
| SHY Short-Term US Treasuries | —Unavailable | 100.0 | $81.20 | +4.6% |
| IEF Intermediate US Treasuries | —Unavailable | 100.0 | $89.45 | +5.2% |
| TLT Long-Term US Treasuries | —Unavailable | 102.0 | $77.87 | +6.5% |
| TIP Inflation-Protected Treasuries | —Unavailable | 104.0 | $104.52 | +6.0% |
| LQD Investment-Grade Corporate Bonds | —Unavailable | 96.5 | $102.47 | +5.0% |
| HYG High-Yield Corporate Bonds | —Unavailable | 95.5 | $77.14 | +6.0% |