Wednesday, July 23, 2008

The Secret Sauce Revealed...

There was a guess that the 'Secret Sauce' was a Corporate Bond Index and one that the 'Secret Sauce' was instead a Treasury Index. As these (actually a combination of the two in the form of a Long Government / Credit Index) formed the 'Secret Sauce', I thought I'd take a look at how well these two security types have performed relative to one another...

The results actually surprised me. While there were somewhat large year to year variations, since 1973 the cumulative returns are remarkably close.