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StrikeAndYield crib sheet · information and education only

Fixed Income

Debt instruments that pay interest and return principal — from government bonds to securitised credit.

The shelf — 17 instruments

Plain English 3

Corporate BondLending to companies for a spread: the extra yield is the price of the chance they don't pay you back.
Government BondA loan to a state, and the reference price of money itself — the yardstick every other asset is measured against.
Green & Sustainability-Linked BondsDebt with a purpose clause: either the money is earmarked for green projects, or the coupon itself bets on the issuer's climate targets.

Needs one idea 10

Callable BondA bond the issuer can hand back early — which means you get your money returned exactly when you least want it.
Covered BondBank debt with a safety net: backed by the bank AND a ring-fenced pool of mortgages. Zero defaults in two centuries of Pfandbriefe.
Emerging Market BondsLending to the developing world — in dollars you'll probably get back, or in pesos that will decide what they're worth later.
Floating Rate NoteA bond whose coupon resets with the market — interest-rate risk engineered out, credit risk left in.
High-Yield BondBonds from borrowers the rating agencies doubt — priced somewhere between fixed income and equity, behaving like both.
Inflation-Linked BondA bond that grows with the price level — real purchasing power, contractually guaranteed.
Municipal BondLending to cities, states and school districts — with the US tax code, not the coupon, doing half the work.
SchuldscheinA loan that behaves like a bond and is documented like a handshake — the German middle market's answer to the capital market.
SukukNot a bond — a certificate of ownership in an asset that generates rent. Economically similar, legally very different, and the difference only shows up when something goes wrong.
Zero-Coupon BondNo coupons, one payment: buy at a discount, collect face value at maturity. The purest interest-rate instrument.

Market knowledge 4

Asset-Backed SecurityAny cash-flowing asset — car loans, credit cards, royalties — sliced into bonds of graded risk.
CMBSSecuritised loans against offices, malls and hotels. Fewer, larger, lumpier loans than residential — which makes the analysis property-by-property and the tail much thicker.
Contingent Convertible BondA bank bond with a self-destruct clause: it pays like debt until the bank stumbles — then it becomes equity, or nothing.
Mortgage-Backed SecurityThousands of home loans bundled into a bond — with the homeowners' right to refinance baked into your risk.

What moves prices here

  1. Expected policy rates — The front end is almost nothing else
  2. Inflation expectations — They set the long end more than current inflation does
  3. Supply — More issuance, cheaper bonds, all else equal
  4. Credit spread, where there is credit — It widens far faster than it tightens
  5. Duration and convexity — The same yield move is not the same price move at both ends
  6. Forced holders — Regulation and mandates buy regardless of value

The calendar

Published in advanceGovernment auctions
MonthlyInflation prints
Six to eight times a yearCentral bank meetings
Month endIndex extension
Coupon datesReinvestment

Which risk decides, across the shelf

Failure mode DecidesShare
Market12 of 1771%
Credit12 of 1771%
Liquidity4 of 1724%
Funding0 of 170%
Operational0 of 170%

Counted from the same table each product page prints. Not a rating and not a ranking: there is deliberately no total.

It reaches

Information and education only. Every line on this sheet is derived from the pages of this site, which explain mechanisms in general terms using simplified models. Nothing here is advice, a recommendation, or a valuation to rely on. Conventions differ by market and jurisdiction and change over time. Full disclaimer at strikeandyield.com/disclaimer.