Fixed Income
Today’s price sits at the 28.0th percentile of modeled fair value — 72% of modeled scenarios put fair value above the market.
- Median fair value
- 103.5
- Upside to median
- +3.5%
- Last close
- $70.81
- 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
- +12.9%
- P75
- +9.5%
- Median
- +5.8%
- P25
- +1.8%
- P10
- -1.9%
83% of modeled scenarios end positive.
Starting yield to maturity of 5.47% as the dominant carry anchor, plus roll-down and a partial convergence of the justified yield toward a neutral real rate, less expected credit loss on the corporate sleeves; dispersion set from the class duration of roughly six years against a 70bp annual yield-volatility assumption plus spread risk.
Three years, annualised
modeled- P90
- +8.0%
- P75
- +6.8%
- Median
- +5.6%
- P25
- +4.4%
- P10
- +3.0%
Three-year annualised total return anchored on the starting yield with reinvestment at the forward curve and a larger share of the justified-yield gap assumed to close; dispersion narrows with horizon because carry dominates price change.
Against the Treasury hurdle
- 1y Treasury
- 4.49%
- Modeled excess
- +1.3%
- Basis
- direct
The modeled one-year median total return of 5.8% exceeds the 4.49% one-year Treasury par yield by 1.31 percentage points. This is a modeled spread, not a guaranteed excess return, and it is earned by accepting about six years of duration risk against a one-year hold-to-maturity alternative.
7 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| BND US Broad Bond Market | +1.3Cheap | 103.5 | $70.81 | +5.8% |
| IEF Intermediate US Treasuries | +1.9Cheap | 105.5 | $90.35 | +6.3% |
| TLT Long-Term US Treasuries | +2.0Cheap | 106.0 | $79.97 | +6.8% |
| TIP Inflation-Protected Treasuries | +1.6Cheap | 104.5 | $105.29 | +6.0% |
| LQD Investment-Grade Corporate Bonds | +0.2Fair | 100.5 | $103.50 | +6.3% |
| SHY Short-Term US Treasuries | +0.2Fair | 100.5 | $81.29 | +4.6% |
| HYG High-Yield Corporate Bonds | -1.6Expensive | 96.0 | $77.13 | +6.5% |