After being asked about the timing of the next recession during his interview with Yahoo Finance, Jeffrey Gundlach said that while the global stock market (ACWI) peaked on January 26, 2018, US markets (SPY) hung on until October.
In Bank of America Merrill Lynch’s February 2019 survey, trade war concerns remained the top tail risk cited by global fund managers for the ninth consecutive month.
If we turn back the clock to before the recession, we find that US debt levels weren’t this high, and unconventional programs like quantitative easing helped the economy recover from the Great Recession.
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.
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 […]
Since fallen angel bonds were given investment-grade status earlier, they typically have higher credit quality than most other speculative-grade bonds.
VanEck Given these uncertainties, high yield bond investors may want to ratchet up the credit quality of their portfolios. Fallen angels can be a source of higher quality high yield for investors, given about 77% of the universe was concentrated in BB-rated bonds (just one ratings notch below investment grade) as of April 30, 2017.[2.Composite […]
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 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: […]
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 […]
Gold and oil are good hedges against inflation. While gold usually outperforms, if inflation rates rise along with interest rates, it might gain as much.
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.
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 […]
Higher Rates Not Always Negative for Gold A Fed rate hike in December appears almost fully priced in already. The common argument is that higher rates are negative for gold given that it is a non-yielding asset. Yet, following the first rate hike of the current tightening cycle in December 2015, gold has advanced more […]
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 […]
Higher Rates Not Always Negative for Gold A Fed rate hike in December appears almost fully priced in already. The common argument is that higher rates are negative for gold given that it is a non-yielding asset. Yet, following the first rate hike of the current tightening cycle in December 2015, gold has advanced more […]
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 […]
Higher Rates Not Always Negative for Gold A Fed rate hike in December appears almost fully priced in already. The common argument is that higher rates are negative for gold given that it is a non-yielding asset. Yet, following the first rate hike of the current tightening cycle in December 2015, gold has advanced more […]
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.
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.
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.
The CBOE Volatility Index (or VIX), a measure of market turbulence, tumbled 12% during the week ended September 3, 2016. It was the biggest fall in two months.
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.
Time to revisit asset allocation The drawback is less equity sensitivity. If stocks were to surge, the alternative portfolio is likely to underperform as a third of the equity positon is in low beta and preferred names. If you believe that the bull market has much further to go, you’d arguably be better off with the […]
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.
Albertsons, an American grocery company, issued junk bonds worth $1.3 billion on August 4, 2016. The senior notes were rated B3/B+ and carried a coupon of 5.8%.
The Federal Reserve policy could anchor yields to current levels. The Fed’s balance sheet has explained roughly 55% of the variation in yields over the last eight years.
A QE program doesn’t just create inflation; it causes asset prices to rise as well. After the financial crisis of 2008, the Fed resorted to an ultra-accommodative monetary policy.
Investor flows into high-yield bond funds were positive for the second week. Net inflows into high-yield bond funds were $4.4 billion in the week ending July 6.
High-yield bond issuance gained traction last week after witnessing poor activity in the previous two weeks due to the UK’s stunning decision to leave the EU.
High-yield bond issuance activity was mostly dormant following the long July 4th weekend. The United Kingdom’s stunning vote to leave the European Union had already created volatility.
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.
Investor flows into high-yield bond funds were negative for the third week. Net outflows from high-yield bond funds totaled $1.6 billion in the week ending June 29.
There wasn’t any high-yield issuance in the week ending July 1—the first week YTD with zero volume. In the previous week, high-yield issuance stood at $1.4 billion.
Investor flows into high-yield bond funds were negative last week. According to Lipper, net outflows from high-yield bond funds totaled $562 million in the week ended May 25, 2016.
Investor flows into high yield bond funds were negative last week for the second consecutive week. Net outflows from high yield bond funds totaled $1.9 billion.
