BTC iShares iBoxx USD High Yield Corporate Bond ETF

Last week, Elliott Management filed its 13F for the first quarter of 2020. In the last quarter, the hedge fund’s AUM was worth around $73.15 billion.

At the end of Q3 2019, D.E. Shaw & Co.’s total portfolio of publicly traded securities was worth around $81.2 billion.

Kenneth Cordele Griffin is the CEO of investment management firm Citadel Advisors LLC. He is the hedge fund manager and he founded Citadel in 1990. 

Rising US-China trade tensions have caused all assets, and especially bond markets, to move considerably over the last few sessions.

Jeffrey Gundlach expects 2019 to continue to be a volatile year. The last quarter of 2018 was quite volatile after a prolonged calm in the markets.

Jamie Dimon believes that the recent market sell-off was an overreaction and that there isn’t a recession on the immediate horizon.

The recent market turmoil that shook investors’ confidence has settled for the time being, but…

Legendary investor Ray Dalio has an optimistic view on the US market (SPX-INDEX) as well as on emerging markets (EEM).

The proposed tax cuts and the resulting increase in the federal deficit are expected to impact bond markets. It’s important to consider the Fed’s stance.

The report from the Joint Committee on Taxation included an estimate of budgetary deficits for 2018–2027. Tax reforms could have a limited impact in 2018.

In September, the Federal Reserve announced it will trim its $4.5 trillion balance sheet.

Investor flows in high yield bond funds were positive for the third successive week last week, but their volume fell sharply.

A failure to raise the debt ceiling will likely result in a US government shutdown and a default by the US, which would be catastrophic for the global economy and financial markets (VTI) (USMV).

In this series, we’ll discuss the looming US debt crisis, how the US debt has ballooned so much, and the impact of a debt crisis on equities (VTI), the US dollar (UUP), and fixed income (HYG) markets.

U.S. Steel (X) has a net debt-to-EBITDA ratio of 1.53x, while AK Steel’s (AKS) net debt-to-EBITDA ratio is 2.62x based on TTM financials.

VanEck A Diverse and Growing Category The emerging markets high yield bond market has grown tremendously over the past 10 years, from $56 billion at the end of 2007 to $440 billion as of June 30, 2017.[2. Source: BofA Merrill Lynch.] In addition to growing in size, diversity within the category has also increased. Investors currently […]

VanEck Higher Yield and Lower Duration Compared to U.S. high yield bonds, emerging markets high yield bonds offered a 90 bps yield pickup as of June 30, 2017.[1.U.S. high yield bonds and emerging markets high yield bonds are represented by BofA Merrill Lynch US High Yield Index and BofA Merrill Lynch Diversified HY US Emerging […]

In his interview on the Bloomberg channel on July 31, 2017, former Fed chair Alan Greenspan rang alarm bells about the bond market (BND) being in a bubble.

Since fallen angel bonds were given investment-grade status earlier, they typically have higher credit quality than most other speculative-grade bonds.

VanEck Fallen angel high yield bonds were up 4.8% year to date through April 30, outperforming the broader high yield bond market which rose 3.9%.[1.Source of all data unless otherwise noted: FactSet. Data as of March 31, 2017. Fallen angels are high yield corporate bonds that are originally issued with investment grade credit ratings, and […]

US bond markets are trading on the expectation of an interest rate hike by the US Federal Reserve in June 2017. Last week, bond yields extended their slides.

Loretta J. Mester, president of the Federal Reserve Bank of Cleveland, said she doesn’t want the Fed to fall behind the curve.

In Rosengren’s view, the markets can absorb the rebalancing of the Fed’s balance sheet only if the entire process is done gradually.

The FOMC has stuck to the script written by markets (SPY) and left interest rates unchanged at its May meeting.

The minutes from the FOMC meeting on March 14 and 15 were reported on April 5 and revealed the tone of the conversation among members to be hawkish.

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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.

Municipal bond issuance has been rising over the last few years. More refundings would cause the supply to rise further.

Bond markets are experiencing rising yields due to higher economic growth expectations. However, the 10-Year Treasury yield was still low at 2.4% on March 29, 2017

Donald Trump’s corporate tax plans have the potential to infuse immense liquidity in the economy.

Negative bond yields in Japan and low Fed funds rates in the United States and the Eurozone were one reason emerging market bonds performed well in 2016.

Puerto Rico is currently in a meltdown mode. Over the past decade, it has accumulated $70.0 billion in public debt, which is close to 68.0% of its GDP.

Long-Term Outlook Remains Positive for Gold Bull Market Our view on the long-term gold price is unchanged. We see the recent weakness as a consolidation phase within what we believe is the early stages of the next bull market for gold. We continue to believe dislocations created by the unconventional policies being implemented by central […]

Long-Term Outlook Remains Positive for Gold Bull Market Our view on the long-term gold price is unchanged. We see the recent weakness as a consolidation phase within what we believe is the early stages of the next bull market for gold. We continue to believe dislocations created by the unconventional policies being implemented by central […]

So, if we’ve reached the top in bond (TLT) prices, one can only expect a reversal from here.

The possibility of a 25-basis-point rate hike in December is quite high since Donald Trump was elected president, and the markets are already pricing in a hike.

According to Richard Bernstein, “Few investors seem to appreciate the magnitude of the opportunity cost of avoiding equities.”

AngloGold Ashanti’s net debt fell 14% in 3Q16 compared to 3Q15. A large part of this reduction was due to improvement in the company’s generation of free cash flow.

Negative bond yields in Japan and the Eurozone, coupled with very low federal funds rates in the United States, are part of why emerging market bonds and currencies have performed so well in 2016.

The Federal Reserve’s second last meeting of 2016 is now over, leaving only one meeting left in which the central bank can enact a rate hike.

Treasury yields witnessed a secular rise in October. Except for yield on the one-month Treasury bill, which remained flat month-over-month, all other tenors saw a visible rise in yields.

Non-financial storeholds of wealth could gain popularity Based on his view expected return relative to risk is going to be bad in the foreseeable future, Ray Dalio has identified two investment avenues that he believes could become more attractive. Dalio suggests that we may see non-financial storeholds of wealth gain popularity. More money may flow […]

In September, gold (GDXJ) prices rose sharply against all major currencies except the yen.

Investors have once again flocked to bonds, the Japanese yen, and gold due to the 10.0% fall in China’s exports and concerns over a major rejig by the central banks.

Gundlach observes that the two-year Treasury yield has bottomed out, while the five-year Treasury is also almost double its mid-2012 lows.

High-yield bonds gained popularity due to higher yields compared to Treasury bonds, whose yields were being pushed down by the Fed’s interest rate policy.

The December 2015 rate hike was the first since the 2008 global meltdown. Now the Fed is hinting at the first rate hike of the year to come in December 2016.

You historically can’t get a high level of yield from relatively safe fixed income investments.

What does all this tell us? First off, there just aren’t as many opportunities for U.S. investors in international developed bond markets.

The correlation between oil and high-yield bond indexes is very high. Where oil goes, high-yield bonds follow.

The three-month Volatility Index (or VIX), which measures the implied volatility of options on the S&P 500 stock market index, is approaching record lows.

Yields on high-yield debt (HYG) (JNK) and spreads between high-yield debt and Treasuries both fell over the last year.

The uncertain global environment created after the Brexit vote made investors hope for a perpetual low rate environment. The prospect of further easing from central banks in the developed markets has spurred strong demand for government debt.

Between 2003 and 2007, when the economic growth was strong, the correlation between stocks and bonds was -0.18.

In this series, we’ll see why emerging market bonds are looking attractive, how the Market has gained position this year, and the risks emerging market bond investors face.

The three US equity stock indexes we review in this weekly series were mostly flat from August 11–18, 2016. This came after the minutes from the July 26–27 FOMC meeting.

AngloGold’s net debt fell by 32% in 1H16 over 1H15, mostly due to the sale of its Cripple Creek & Victor mine to Newmont Mining for $820 million.

Under the current uncertain economic circumstances, investors searching for higher yield might turn to fixed income.

Post Holdings (POST) issued junk bonds worth $1.75 billion on July 25. The senior notes were rated B3/B and carried a coupon of 5.0%.

The rise of the actively selective investor becomes more nuanced within the context of our entire ETF universe.

In 2015, AngloGold sold a mine to Newmont for $820 million. It used the proceeds to buy a part of its high-yield bond, which lowered its net debt.

EchoStar (SATS) is a global provider of satellite and video delivery solutions. It issued junk bonds worth $1.5 billion on July 20.

Investor flows into high-yield bond funds were positive for the week ended July 6, 2016, after three consecutive weeks of negative outflows.

The three US stock indexes that we review in this weekly series rose from July 5–12, 2016. Robust US jobs data boosted investor sentiment and eased the fear of an economic slowdown.

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.

US equity markets have recovered from the declines on Monday, June 27, 2016. But money is flowing into safe havens as investors are remaining cautious.

HY EM bonds currently offer higher yields than both high yield US corporate bonds (HYG) (JNK) and high EM sovereign bonds.

AmeriGas Partners (APU) is a publicly traded MLP. It issued Ba3- rated junk bonds worth $1.35 billion on June 20.

With the Brexit fallout, the Federal Reserve will most likely delay the next interest rate hike until the end of this year or even next year.

Not only are European stocks cheaper than American ones, they also offer more attractive dividend yields.

Generally, municipal bonds (SUB) are immune to market volatility, thus providing considerable support to a portfolio.

In his June 2016 investment outlook, Bill Gross stated that “credit risk or credit ‘carry’ offers little reward relative to potential losses.”

Among the top ten ETF inflows and outflows on June 3, we can see a “risk-off” fund flow picture that goes hand in hand with the NFP miss that day.

Albertsons Companies, an American grocery company, issued junk bonds worth $1.3 billion on May 25, 2016. The bonds will mature on June 15, 2024.

Adding carry to your portfolio in a low-return scenario could cushion your portfolio.

Issuance in the high yield primary market gained traction due to an improved market environment. Junk bond issuance rose last week.

Dollar-denominated high yield debt amounting to $8.2 billion was issued in the week ended May 20, 2016. This was the fourth-largest issuance year-to-date.

Cheniere Corpus Christi Holdings, a wholly owned subsidiary of Cheniere Energy (LNG), issued junk bonds worth $1.3 billion on May 12, 2016.

High yield bond issuance activity gained traction last week on improved Market sentiment. The total US dollar-denominated issuance of high yield debt is $60.8 billion in 2016 YTD.

Hanesbrands issued Ba2/BB rated dollar-denominated junk bonds worth $1.8 billion on May 3. It will use the proceeds of the loan for refinancing purposes.

Last week brought the total US dollar-denominated issuance of high-yield debt to $66.5 billion in 2016 YTD—47.0% lower than the same period in 2015.

The start of 2016 has been marked by an increase in the quantum of fallen angel bonds in the high-yield bond market (HYG) (JNK).

High-yield bond funds regained some lost favor this year. Fallen angel bonds could be an extremely attractive value proposition for investors.

Gundlach prefers mortgages versus the high-yield bond market. He identifies inherent risks when investing in the high-yield market.

Last week brought the total US dollar-denominated issuance of high-yield debt to $61.6 billion YTD in 2016—47.0% lower compared to the same period in 2015.

Widening spreads indicate a slowing economy. Since companies are more likely to default in a slowing economy, credit risk related to their bonds rises.

High-yield bond issuance activity was strong last week. Dollar-denominated high-yield debt amounting to $10.1 billion was issued in the week ending April 22.

According to data from S&P Capital IQ/LCD, dollar-denominated high-yield debt amounting to $4.6 billion was issued in the week ending April 15.

Numericable SFR is a French cable and telecommunications company. It issued dollar-denominated junk bonds worth $5.2 billion on April 6.

Together, the S&P 500 Index, the Dow Jones Industrial Average (DJIA), and the NASDAQ fell marginally from March 29 to April 5, 2016.

BUTCHER: Thank you. Do you see any specific opportunities today? COLBY: I think there are two fairly distinct opportunities for investors to consider. One is based on interest rates and interest rate outlooks. The other is based on risk that investors might be willing to assume on a credit basis. From an interest rate perspective, […]

Three US equity indices rebounded after the terror attack at the Brussels airport and metro station on March 22. The S&P 500 index rose 1.2%.

High yield bond issuance rose last week as the stock Market improved due to the rise in oil prices. Dollar-denominated high yield debt amounting to $4.1 billion was issued last week.

Municipal bonds (or munis) were the best performers in 2015 with returns of 3.2%. Meanwhile, investment-grade corporate bonds (LQD), long-dated Treasuries (TLT), and high-yield bonds (HYG) all gave negative returns in 2015.