Fixed income

Traditionally, municipal bonds have been sold to investors in units of $1,000 or even $5,000 or $10,000 per bond, a size that deters many smaller investors or leads them to turn to a bond fund. Now California is doing something about that by offering $25 mini-bonds.

Most analysts and economists believe the Federal Reserve Board is practically compelled to do something to help boost the economy when it meets later this month. If and when the Fed makes a move, it will likely have a negative impact on bond funds.

Local revenues are on the rise—the first quarter of 2011 market the sixth consecutive period in which state and city revenues have increased.

The stock market may be reeling, the U.S. sovereign debt rating may have taken a hit from Standard & Poor’s and the Eurozone debt crisis may be worsening, but high-quality corporate bonds are looking like a great deal.

A failure by politicians in Washington to reach a deal to raise the U.S. debt ceiling in the next few days -- particularly if Standard & Poor's makes good on its threat to lower the country's AAA sovereign debt rating -- could have “deep and wide reverberations” in credit and equities markets, according to Todd Rosenbluth, an analyst at S&P Equity Research. But bond funds might be unscathed.

Bond investors have been put on notice by rating agency Standard & Poor's that it is not just the U.S. sovereign debt rating that is in jeopardy because of the ongoing wrangling in Washington over raising -- or not raising -- the federal debt ceiling and, especially, whether or how lawmakers cut the government’s massive and ever-growing deficit.

American Beacon Advisors has launched the American Beacon Flexible Bond Fund, which seeks to deliver positive returns no matter what the market direction by investing in a broad range of fixed income instruments.

Late last year, prominent banking analyst Meredith Whitney warned investors that between 50 and 100 municipalities were headed for default and that the carnage would cost investors hundreds of billions of dollars. But at the midway point of 2011, that's hardly been the case.

The new tool ranks the safety of 44 countries' bonds, with Norway topping the list thanks to its low debt and comparatively fewer risks from abroad while the U.S. checked in at No. 15.

A trio of new bond fund products on offer by Fidelity, iShares and PIMCO provide smaller investors with the opportunity get more of the benefits of a bond ladder without the usual bond fund downsides.

Fidelity Investments on Wednesday announced the launch of four Fidelity Defined Maturity Funds, a series of four actively managed municipal income funds. The funds seek to bridge the gap between individual bonds and bond funds and, therefore, fill a gap in municipal bond investing, Fidelity said.

Morgan Keegan & Co. agreed to a $200 million settlement with the Financial Industry Regulatory Authority (FINRA) and five state securities regulators that resolves a civil case brought against the firm last year accusing top executives of defrauding investors by artificially inflating the value of mortgage-backed securities in several of its mortgage bond funds.

California Gov. Jerry Brown’s quick veto of the budget adopted by the Legislature last week has renewed concerns about the state’s cash flow amid another long ­delay.

A new report from Morningstar looking at May’s fund flows adds further evidence that investors are growing less enchanted with equities in favor of more conservative assets.

The New York City Transitional Finance Authority Wednesday will competitively bid $300 million of building aid revenue bonds, including $100 million of taxable qualified school construction bonds.

With Fitch Rating's admonishment last week it would put U.S. debt on watch for a downgrade in early August, all three of the major rating agencies now have issued unprecedented warnings about the U.S. debt crisis, putting the country’s AAA credit rating in danger. But so far, Treasury investors have reacted with a collective yawn.

As investors become more worried about the U.S. economy, they seem to be pouring more money into bond funds and international equity funds and less money into domestic equity funds and ETFs, according to Strategic Insight, a business intelligence provider to the worldwide fund industry.

Tradeweb said it added high-yield bonds to its European credit trading platform. The addition of high-yield bonds was intended to help asset managers "to enhance portfolio returns,'' in a period of low interest rates.

Are municipal bonds coming back into favor? Some industry analysts seem to think so.

Following passage of a new state law aimed at assuaging investor fears of bankruptcy, the city of Ecorse next week will sell $9.3 million of financial recovery bonds, making it one of Michigan’s only municipalities to enter the bond market while under state-controlled receivership.