How Bond Buybacks Add Value
As of June 30, 11 fallen angel companies had issued tender offers YTD, boosting their bond prices by 5% on average.
Fallen angel bonds—high-yield bonds originally issued with investment grade credit ratings—are generally known for offering potential value. A big source of this value has been the tendency of fallen angels…
Fallen angels (ANGL) have had lower average default rates than the broad high yield bond (HYEM)(IHY) market historically (3.58% versus 4.19%).
Historically, it seems that fallen angels generally perform well across interest rate environments.
About 75% of fallen angel bonds (ANGL) were rated BB as of May 31, 2016. Original-issue investment-grade bond issuers tend to be larger.
Average hourly earnings are a major indicator to be considered when looking at employment statistics. Average hourly earnings rose $0.02 to $25.61 in June.
HY EM bonds currently offer higher yields than both high yield US corporate bonds (HYG) (JNK) and high EM sovereign bonds.
Investors are flocking to government bonds (BND) of developed markets, which is causing downward pressure on interest rates.
High yield emerging markets corporate bonds have had a strong start to the year, outperforming emerging markets equities with a 7.8% year-to-date return at the end of May.
Are fallen angel bonds akin to value stock (IWD)(MOAT) in the equity (IWF)(VOO) world? If so, how?
VanEck responds to our questions and looks at how fallen angel bonds provide attractive relative income without an unsavory level of risk.
Yields remain at unattractive levels. This has caused yield-thirsty investors to flock to high-dividend-yielding stocks, driving their valuations higher.
Not only are European stocks cheaper than American ones, they also offer more attractive dividend yields.
Due to higher and consistent returns, investors are buying municipal bonds at a record rate.
Historically, investment-grade and high-yield municipal bonds (MUB) have a very low correlation with most other asset classes.
Generally, municipal bonds (SUB) are immune to market volatility, thus providing considerable support to a portfolio.
Over the years, average returns from municipal bonds (CMF) are in line with the broader index. They outperformed in some years and underperformed in others.
Municipal bonds (MUB) have provided an excellent return in the past year. The returns are even better if we account for their tax benefits.
Adding carry to your portfolio in a low-return scenario could cushion your portfolio.
The spread between high-yield bonds and ten-year Treasuries was high over the past three years, enough to lure investors to corporate bonds and away from equities.