Uncovering Hidden Opportunities in Corporate Bonds
As investors navigate the complex world of corporate bonds, it’s essential to have a clear understanding of the underlying risks and rewards. With the help of advanced analytics and big data, individual investors can now make informed decisions that rival those of institutional investors.
A New Era in Risk Management
The traditional approach to credit ratings, invented in 1860, is no longer sufficient in today’s fast-paced market. Modern big data default probabilities, such as those provided by Kamakura Corporation, offer a more accurate assessment of risk. By leveraging these tools, investors can effectively arbitrage legacy credit ratings and make more informed decisions.
Ranking Bonds by Reward-to-Risk Ratio
To maximize returns, investors need to identify the best risk-adjusted value of corporate bonds traded in the U.S. market. This can be achieved by calculating a forward-looking assessment of cash needs and ranking bonds from best to worst by their reward-to-risk ratio. With this approach, investors can confidently select bonds that align with their investment goals.
Expert Insights from a Seasoned Professional
Dr. Donald R. van Deventer, founder of Kamakura Corporation and co-head of the Center for Applied Quantitative Finance at SAS Institute Inc., brings over 40 years of experience in risk management to the table. His expertise has helped institutional clients with total assets or assets under management of $48 trillion. Now, he’s leading the investing group Corporate Bond Investor to bring state-of-the-art risk analytics to individual investors.
Empowering Individual Investors
With the Corporate Bond Investor, individuals can access the same analytical processes used by institutional investors. This includes a daily ranking of corporate bonds by best risk-adjusted return, enabling investors to make informed decisions and stay ahead of the curve. By democratizing access to advanced analytics, individual investors can now compete on a level playing field with institutional investors.
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