Compared with the glut of information available on the Web for stocks, information about bonds is downright scarce.
Oh, sure, a search for bond-related sites turns up hundreds of URLs. The
Bond Market Association
, the trade group representing firms that underwrite and trade debt securities, performs a great service by cataloging on its
Web site dozens of sites containing bond-related information (click on "Gateway to Bond Market Links" in the left margin). But there's very little wheat amid loads of chaff. Easily half the sites are either broker-dealers with little to offer beyond market commentary, or data vendors hawking expensive analytical software to institutional investors.
found nine sites in three categories (excluding the online brokers and the sites that display Bond Express data) that are worth bookmarking. The first, in a category by itself, is Treasury Direct, which lets you buy new Treasury issues directly from the government without paying transaction fees. The second category is sites that give yield indications on the various bond markets. Finally, the Bond Market Association makes available trade data on a next-day basis for muni bonds and has plans to do the same for corporate bonds. Assuming relatively stable markets, this info will give you a sense of where the market is for the bonds you're interested in buying or selling.
If you want to assemble a laddered portfolio of Treasuries (a recent
Q&A explained how to set one up) that you intend to hold to maturity, and you can wait till the next quarterly auction to start, nothing could be easier than using Treasury Direct. Go to the
Web site and set up an account. Once you've filed the paperwork, orders can be entered via phone or Internet. You get your bonds or notes at the same price that the dealers pay for theirs, and nobody makes a profit on the transactions. (Incidentally, if you need to sell a bond or note, Treasury Direct will solicit bids on it for you and sell it to the highest bidder for a $34 fee.)
Many of the online brokers volunteer to place auction orders for you -- for a $25 to $50 fee. Considering that it's as easy to order from Treasury Direct as it is to order from a broker, why pay extra? If you're hellbent on keeping all your assets in a single place, there's no penalty for moving securities from Treasury Direct to a brokerage account after you've bought them.
Why would anyone buy Treasury securities through a broker rather than directly from the Treasury? Two reasons.
You may be able to get older bonds at a lower price from a broker. When you buy from the Treasury you're buying a new issue at auction. In the Treasury market, most of the trading activity takes place in the new, or active, issues -- the most recently issued two-, five-, 10- and 30-year notes and bonds. By definition, these are the most liquid issues, and dealers, when they bid for the notes at auction, will pay more for them for that reason, driving the yields lower. If you're not planning on trading your Treasuries, you have no use for the liquidity, and it may make more sense to buy from a brokerage firm if it offers you a yield significantly higher than the active issue's. Also, the bond and note auctions only roll around four times a year, and a new 30-year bond is sold in only three of the four, so you might not want to wait for an auction.
The other reason you might want to go to a broker for Treasuries is to buy zero-coupon bonds, a.k.a. STRIPS or Separate Trading of Registered Interest and Principal Securities. The Treasury doesn't issue zeros: Dealers create them by taking regular bonds and notes, "stripping" them into their component parts, and repackaging them as securities that pay $1,000 of face value at maturity. If Treasury zeros are what you want (a recent
Fund Forum discussed the pros and cons), you need a broker to get them.
Where's the Market?
If you're prepared to shell out hundreds of dollars a month for market data from
, you'll have no trouble finding out approximately where bonds of various types are trading.
It's not so easy if you're relying on the Web. Still, a handful of sites give free indications on Treasury, municipal and corporate issues.
For Treasuries, the two best sites are
GovPX is an organization owned by the firms that serve as
primary dealers of government securities and four interdealer brokers. It collects and distributes data on interdealer trades of Treasury securities through various data vendors and through its Web site.
The Treasury composite page on the Web site, though more difficult to read than it should be and not updated often enough (once an hour), is the most complete source of Treasury market info on the Web we've found. We've pulled all the information you need to understand it together in the table at left.
Bloomberg's Treasury page has less information, but it's easier to read and the quotes are updated more frequently.
For municipal bond indications, Bloomberg and the Bond Market Association also offer a valuable service, in the form of a
yield scale. Shortcomings: This is only updated once a day, and it's only for a single broad category of munis -- insured revenue bonds.
Standard & Poor's
, the bond rating agency, offers a more complete
scale on its
Web site, giving indications for all of the major rating categories. But again, it's only updated once a day.
And in both cases, the scales are national scales, meaning that the yields are the highest you're likely to see. "National" names in the muni market are states like Texas and Illinois that don't have an income tax, so there's no incentive for residents to buy bonds issued in those states to avoid the tax. States with high income taxes are called "specialty states," and their muni yields are lower because of their additional exemption. New York bonds, for example, typically yield a basis point or 2 less than the national scale. Florida yields are generally at least 5 basis points "richer" than national yields. And California bonds yield close to 10 basis points less than national names.
For corporate bond indications,
provides a valuable
service supplied by Bridge. For each of the five main corporate bond sectors -- banks, financials, industrials, transportation and utilities -- it quotes yield spreads to Treasuries for a range of maturities at each rating level. But here, too, the data are delayed, updating just once a day.
Indications on individual corporate issues -- about 50 bellwether bonds with investment-grade ratings -- can be found on
BMI Quotes. The indications, which update three or four times a day, are based on institutional trades, said Teri Geske, senior vice president at Capital Management Sciences, another division of
Data Broadcasting Corp.
(The same indications are updated hourly on another CMS
Web site. Registration is required but free on the site, which markets the company's BondVu software.)
For a Small Fee ...
Finally, while these sites provide information for free, a couple of sites sell data at prices individual investors might consider paying. For $25 a month or $200 a year you can get access to Yield City, a service of
Liberty Brokerage. The system quotes the full run of Treasuries (the active issues and the older issues) and corporate spreads by sector, updating every five minutes. And investors in convertible bonds will find a wealth of information on the entire sector on
ConvertBond.com for as little as $10 a month. The site is not connected in any way with Bloomberg, despite its nearly identical design.
A third and final frontier for individual investors in search of bond market enlightenment on the Web is transaction reporting for munis and corporates.
In response to calls from regulators, muni and corporate market participants have begun to compile and publish trade data, to give investors the ability to see recent prices paid for bonds that are comparable to ones they are considering buying or selling.
For munis, the Bond Market Association recently started publishing, in a searchable format, a
list of bonds that traded at least four times on the previous day, specifying the highest and lowest prices at which each bond changed hands.
A similar feature for corporate bonds is
slated to follow, although it has been plagued by delays related to a dispute over distribution rights to the data, according to the institutional newsletter