bvPerspectives was developed specifically to provide a graphical overview of the retail bond market available for the individual investor.

The line and bar graphics along with their underlying tabulated data show how the yields of typical bonds vary with credit rating, issue maturity and the investor’s time frame.

Yields of actual bond issues vary around these typical yields - to a lesser extent with AAA rated bonds but with increasingly greater amounts with reduced credit rating. bvPerspectives provides yield data for credit ratings from AAA to B. The lowest rated issues, CCC and lower, although analyzed, are not included here because of their substantial variability and statistical uncertainties.

The yields of U.S. Treasury bonds available in the retail market are included as a benchmark. U.S. Treasury bonds are secured by the full faith and credit of the United States government and thus provide a retail market baseline for bond yield comparisons.

Included in bvPerspectives are line and bar charts along with their tabulated data for Corporate, insured Municipal and not-insured Municipal bonds. Agency bonds, normally, AAA rated, are included in the analyses of Corporate bonds. Insured Municipals are normally AAA and AA rated bonds.

The data are neither smooth nor theoreticaly adjusted. Instead they reflect the dynamics of the bond market.

The Line Charts

The bvPerspectives Line Charts show bond yield data versus maturity for bonds for credit ratings from AAA to BBB. Yield data for issues rated BB and B are not shown because of their greater variability.

Immediately evident is the uneven progression of yield with rating, thus providing opportunities to select issues with more attractive yields and credit rating. For example, there might be a noticeably small (or large) yield advantage for an AA rated bond when compared with an AAA bond. An investor can use this information to see that the higher rated bond is the better value or in deciding that the additional yield is worth the incremental credit risk.

Similarly are the uneven progressions with time and thus the incremental yield an investor could earn given additional maturity risk. Usually, the longer the maturity of the bond, the greater the yield. However, sometimes longer-term bonds pay less than shorter-term bonds. This situation is referred to as ‘inverted yield curve’, and indicates that an investor can earn higher yields buying shorter-term bonds.

The Bar Charts

The bvPerspectives bar charts present the bond yield data from a different perspective, showing the typical yields for three time frames, specifically, Short, Intermediate, Long Term. Short Term includes issues with 6 months to 3 years from maturity. Intermediate and Long Term bonds are, respectively, 3 to 10 years and 10 years to 30 years from maturity.

These charts along with the line charts illustrate the uneven progression of yield with rating and maturity and provide insight into the relative attractiveness of specific ratings and time frames.

The Tabulated Data

Line and bar charts present excellent perspectives of the variation and variability of the retail bond market. However, quantitative data is best obtained from data tables.

The bond yields as presented constitute a statistical analysis of quotes available in the market place to the small retail investor purchasing issues of less than one million dollars and may not precisely agree with the indices provided by institutions such as Lehman Bros. or Merrill Lynch.