Bond Market Reform Is a Priority for Policymakers
In the third and final phase of bond (EMB) reforms that began after 2015, the substantial activities of the market were open to global investors.
Real Insights
China’s Onshore Bond Market Reforms
China’s onshore bond market (EMB), consisting of locally denominated and issued bonds, is larger than the offshore bond market.
Will Fallen Angel Bonds Continue to Capture Solid Returns?
VanEck How fallen angels may complement high yield portfolios Income investors may want to consider fallen angels as a complement to their high yield bond allocations given their higher credit quality. Fallen angels’ higher average credit quality than original-issue high yield bonds may help absorb more of the potential broader market volatility that may occur […]
Are Stock Returns during Summer Months That Bad?
The health care sector (IBB) (VHT) (XBI) has been the most challenged sector since Donald Trump’s presidential campaign.
Will the Energy Sector Lag in Summer Months?
2016 proved fruitful for the energy sector (XLE) with an improvement in oil prices (USO) (USL).
Does the Financials Sector Sweat the Summer More?
The big winner since the US elections has been the financial sector, which is up 14% as of May 8, 2017.
Healthcare Moves Have Been Muted, but Could We Get a Surprise?
Rising interest rates don’t negatively affect healthcare as much as some other industries. But it has still underperformed since the US elections.
How Apple Has Used the Proceeds from Its Green Bond
Apple (AAPL) issued $1.5 billion in bonds dedicated to financing clean energy projects across its global business operations in February 2015.
Why High-Yield Bonds Are Needed in a Portfolio
AB Summing It Up High-yield bonds present an alternative for investors at an uncertain crossroads. Equity valuations seem attractive based on some measures, but volatility has led many investors to search for ways to temper the risk in their portfolios. At the same time, bonds—a popular risk reducer—are less attractive than normal due to extremely […]
Rapid Growth in Global High-Yield Market
AB Is This a Global Story? In our view, designing a high-yield allocation today should involve a global perspective. Our analysis focuses on US high-yield bonds, in large part because this market provides a lengthier historical data set than other high-yield markets do. But the global market for high-yield bonds continues to expand and evolve: […]
High Yield Bonds: Are Rising Rates a Risk?
AB Are Rising Rates a Risk? Investors thinking about introducing high-yield bonds into an asset allocation might ask if it’s the right time to invest in them. With interest rates at historic lows, won’t there be substantial risk to high-yield bonds when rates begin to rise again? It’s a fair question, and there are risks […]
What Role Do High Yield Bonds Play in a Portfolio?
AB High Yield in the Portfolio Framework Given their higher risk levels, we’d expect that stocks would continue to outperform high yield over the long run. However, high-yield bonds have clearly demonstrated that they bring much to the table if they’re combined with stocks in a carefully designed and maintained portfolio. But not every investor […]
How Portfolio Rebalancing Boosts Overall Returns
AB Rebalancing in the Tails Because stocks have been so much more volatile than high yield, periodic portfolio rebalancing tends to occur during performance extremes—the “tails” in return distributions—when the gap between high-yield and equity returns is wide. This magnifies the “buy-low, sell-high” effect that rebalancing contributes to a portfolio’s performance. Of course, the gaps […]
How High-Yield Bonds Can Help Reduce Risk
AB A Place at the Asset-Allocation Table For investors seeking to control volatility in their equity portfolios while still maintaining return potential, high-yield bonds could represent an effective solution. A typical approach to moderating equity volatility is to reallocate assets to the greater stability of investment-grade bonds, or even cash. But this can exact a […]
Why High Yield Bonds Are an Effective Match with Equities
AB Keeping Pace with Equity Returns over Time In fact, when we widen the lens to take in the last three decades, high-yield bonds have nearly matched equity performance. And they’ve done it with much lower volatility. Since July 1983, stocks have produced an annualized return of 10.9% (Display 1). High-yield bonds have nearly equaled […]
How High-Yield Bonds Are Connected to Other Asset Classes
AB Looks Are Deceiving But even though high-yield bonds look like other bonds, they don’t necessarily act like other bonds. This insight can have important implications for how investors consider them in an overall portfolio context. High-yield performance patterns, for example, don’t track those of other fixed-income sectors very closely over the long term. Looking […]
Why High Yield Bonds Are Attractive
In this series, we’ll discuss the many advantages of high yield bonds, their correlation with other asset classes, the rise of global high yield markets, and why high yield bonds should command a place in a portfolio.
Could Lower Tax Rates Affect Municipal Bonds Negatively?
For investors in the top tax bracket, municipal bond (XMPT) yields on a tax-equivalent basis are roughly 5.0%.
How Rate Hike Will Affect Banking Stocks
As the Federal Reserve begins to tighten the credit cycle, the potential impact on various equity sectors varies.
How Refundings Could Affect Municipal Bond Returns This Year
Municipal bond issuance has been rising over the last few years. More refundings would cause the supply to rise further.
The Many Uncertainties Municipal Bonds Face in 2017
Municipal bonds were the worst-performing bond class in 2016 after solid returns in 2014 and 2015, and high-yield bonds (JNK) outperformed.
Why Gold Stocks Edged Higher after Rate Hike
After remaining subdued for the past few months, gold futures last week recorded their highest weekly gain of 2.4% since February 3.
Why Treasury Yields Fell despite Rate Hike
Higher interest rates affect bonds much more than stocks because interest rates and bond prices are inversely proportional to each other.
Why the Market Is Obsessed with Interest Rates
The increase in interest rates has a ripple effect on the economy and the stock market (SPXL).
Financials Have Soared, Mostly Due to Trump’s Promises
The financial sector has performed the best since the elections. Higher interest rates are likely to improve banks’ margins going forward.
How Trump’s Proposed Policies Have Caused Sector Divergence
Despite the stellar run that financials (FAS) have had since the US elections in November 2016, financials are trading at very reasonable levels.
Can Green Bonds Provide a Potential Hedge against Climate Risk?
In this environment, green bonds could offer investors an option to hedge their portfolios against climate-related risk and enjoy a good risk-return profile.
Green Bonds and Conventional Bonds: What’s the Difference?
There isn’t much difference between a conventional bond and a green bond (GRNB), also known as a climate bond. Both have similar risk-return profiles.
How Different Asset Classes Are Performing
According to Morgan Stanley, US high yield bonds (IGHG) (LQDH) generated a return of 14.4% in 2016.
Will Congress Reset Debt Levels?
The CBO expects the budget deficit to remain below 3% of GDP until 2019.
Why Did MLPI Outperform AMJ?
The ETRACS Alerian MLP Infrastructure Index ETN (MLPI) and the JPMorgan Chase Alerian MLP Index ETN (AMJ) are two of the largest MLP ETNs.