SPDR® Barclays High Yield Bond ETF

Latest SPDR® Barclays High Yield Bond ETF News and Updates

  • Why tight credit spreads usually mean a period of global expansion
    Financials

    Why tight credit spreads usually mean a period of global expansion

    Today, most measures of credit conditions are positive, with tight spreads across all of fixed income. Even high yield spreads have come in after a short scare last month.

    By Russ Koesterich, CFA
  • Financials

    Rate hike horizon: September’s jobs report was largely positive

    After September’s strong jobs numbers, a Fed rate hike could be on the horizon early next year. Russ explains two equity market implications.

    By Russ Koesterich, CFA
  • uploads///high yield muni bonds
    Company & Industry Overviews

    Muni Bond Investment Opportunities in the Current Environment

    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, […]

    By VanEck
  • Energy & Utilities

    Why issuers stayed away from high-yield debt markets

    Issuance slowed to a trickle when market conditions were unfavorable in August. A number of transactions were either postponed, re-priced, or withdrawn from the market altogether. There was an increase in high-yield debt risk perceptions.

    By Phalguni Soni
  • uploads///Treasury yields continue to be on the lower side
    Macroeconomic Analysis

    Why wage growth could cause rates to rise

    Wage growth could cause rates to rise. A hike in wage rates could boost consumption and encourage individuals outside the labor force to join. This will increase disposable income.

    By Russ Koesterich, CFA
  • Energy & Utilities

    Why smaller oil and gas firms are foraying into high yield debt

    High yield debt markets saw $6 billion worth of new supply issued across 12 transactions in the week ending October 24.

    By Phalguni Soni
  • uploads///LL Issuance
    Consumer

    Must-know leveraged loan update: Issuance increased last week

    The primary loan market remained busy with opportunistic issuers coming in to test the investor’s interest for floating interest rate loans.

    By Sandra Nathanson
  • uploads///High Yield Bonds Appear Attractive
    Macroeconomic Analysis

    High Yield Offers Attractive Potential in a Yield-Starved World

    In an environment of generally decent, albeit recently disappointing, growth and gently rising yields, high yield offers attractive potential in a yield-starved world.

    By Russ Koesterich, CFA
  • uploads///Junk Bond Yields in  and
    Company & Industry Overviews

    MDC Partners Issued the Most Junk Bonds in the Week to March 18

    MDC Partners (MDCA) offers marketing and communication network services. It issued dollar-denominated junk bonds worth $900 million on March 18.

    By Lynn Noah
  • uploads///US High Yield Bond Fund Flows
    Financials

    Must-know: High yield fund flows regaining strength, time to dip back in?

    After several weeks of record outflows, investors start regaining trust Fund flows gauge where most investors are moving their money. While following this indicator assumes momentum strategies work, in weeks of high inflows, there will be a delay between the time when funds come in and when managers can invest them in assets, so they […]

    By Dale A. Norton
  • uploads///The Non Farm Payroll Figures Have Been Impressive in the Last few Months
    Macroeconomic Analysis

    The Quest for Yield: Chasing Dividend Stocks

    If you had to sum up investing in the US markets after the Great Recession in a few words, you would probably say something like “the quest for yield.”

    By Sanmit Amin
  • Financials

    Must-know: Future impacts of financial stability measures

    The Fed currently uses considerable staff resources in monitoring financial markets for risks arising from financial instability.

    By Phalguni Soni
  • Financials

    Overview: High-yield debt market borrowers set new 2014 records

    Despite a holiday-shortened week, issuance volumes for leveraged loans surged by almost 49%, week-over-week, to $21.3 billion.

    By Phalguni Soni
  • Financials

    Why investors piled into junk bond funds

    High market volatility usually increases risk perceptions for junk bonds (PHB). This increases spreads and yields. As a result, bond prices decrease.

    By Phalguni Soni
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    Financials

    When geopolitical risk takes precedence over interest rate risk

    The total returns on municipal debt came in at 3.32% in the first quarter of 2014, as measured by the Barclays Municipal Bond Index.

    By Phalguni Soni
  • Financials

    Why Kocherlakota says price targeting beats inflation targeting

    Along with the two suggestions mentioned in Part 6 of this series, Narayana Kocherlakota also dropped in two additional suggestions for improving the FOMC framework statement.

    By Surbhi Jain
  • uploads///Bond ETFs Have Had a Tough Time in
    Macroeconomic Analysis

    Where Can You Find Relative Value within Fixed Income?

    Where’s the relative value within fixed income? High yield bonds appear relatively attractive.

    By Jeffrey Rosenberg
  • Financials

    Why the FOMC believes that credit conditions are still strong

    Easier borrowing conditions stimulate business investment among firms. Higher investment would generate employment and benefit firms’ revenues and profits.

    By Phalguni Soni
  • Financials

    Overview: High-yield bond markets since the Great Recession

    High-yield, or junk-rated, bonds have higher yields than investment-grade bonds—like U.S. Treasuries and high-quality corporate debt. They’re issued by borrowers with higher credit risk—for example, with a lower ability to service the debt issued. Investors need a higher return to compensate for the higher risks involved.

    By Phalguni Soni
  • Financials

    Unemployment and discouraged workers: The improvement continues

    This article considers the halfway mark improvement in the U-4 labor data and the implication for fixed income investors.

    By Marc Wiersum, MBA
  • Financials

    Why Fisher and Plosser disagreed with the FOMC policy motion

    Richard Fisher believes that the Fed needs to tighten policy. This is based on the improved labor market and inflation outlook. He also believes that continued monetary accommodation is causing signs of “financial excess” in certain asset classes. He spoke earlier about signs of froth in high-yield bond (JNK) (HYG) markets.

    By Phalguni Soni
  • Financials

    Why are junk bond yields the lowest ever on record?

    The BofA Merrill Lynch U.S. High Yield Master II Index increased by 0.34% over the week ending June 20, and is up by 5.64% so far this year (up to June 20).

    By Phalguni Soni
  • uploads///High Yield Bond Break Prices
    Financials

    Break prices confirming weakness in the bond high yield market

    The price at which bonds are breaking for trading in the secondary market shows a clear downtrend year to date. The price at which bonds are placed with initial investors is given by the original issue discount (OID) and sets the bond’s yield to maturity. The break price, on the other hand, refers to the […]

    By Dale A. Norton
  • uploads///WTI crude
    Fund Managers

    Jeffrey Gundlach: The Junk Bond Market Needs Higher Oil Prices

    Jeffrey Gundlach also warned about the high-yield market (HYG) (JNK). He said the “clock is running out” for energy companies (IEZ) due to low oil (USO) prices.

    By Surbhi Jain
  • uploads///Price Movement in the VFINX and the SPY
    Company & Industry Overviews

    Why Did US Stock Indices Rise?

    Treasury yields fell across the yield curve last week after the US Department of Labor reported that the economy added fewer jobs in April.

    By Lynn Noah
  • Financials

    Why investors are turning to corporate bond ETFs

    Investors seeking exposure to investment grade or high yield corporate debt have increasingly been using fixed income ETFs.

    By Matt Tucker, CFA
  • uploads///Crude Oil Production in the US Has Increased
    Macroeconomic Analysis

    Where Are Oil Prices Heading?

    Oil prices are expected to be lower for longer. This is bad news for high yield bond funds (HYG) (JNK) in the United States.

    By Russ Koesterich, CFA
  • uploads///US High Yield Bond Market Issuance
    Financials

    High yield issuance continues to increase, spike likely unsustainable

    The large high yield bond issuance was the second largest over the past two months and the highest in number of issuances  Weekly issuance can help gauge both the demand and supply of the high yield bond market. New bonds increase the supply available to investors in the secondary market and the demand given indicates […]

    By Dale A. Norton
  • Financials

    Bear strategy: Profit from rising rates with fixed income ETFs

    Investors could consider hedging their short-term duration risk (HYG: 3.98 years, JNK: 4.20 years) with a short position in longer-dated bonds.

    By Marc Wiersum, MBA
  • uploads///Federal funds rate has remained low
    Macroeconomic Analysis

    Why Excessively Low Rates Could Be Harmful

    Excessively low rates have side effects. Treasury yields have been beaten down due to the Fed’s excessive buying. Currently, the ten-year Treasury (IEF) yields are 2.1%.

    By Russ Koesterich, CFA
  • Technology & Communications

    Hedging: You can profit from rising rates with fixed income ETFs

    Should interest rates rise equally in the five-year part of the yield curve as the 20-year part of the yield curve, HYG and JNK would likely decline roughly 3.98% and 4.20% in value.

    By Marc Wiersum, MBA
  • Financials

    Why did investors give US debt markets the thumbs down?

    Volatility, or the index commonly known as the “fear factor,” surged over 34% to 17.03 in the week ending August 1—this was the highest level in almost four months.

    By Phalguni Soni
  • Financials

    Must-read: Use emerging market bonds for higher yield potential

    For those who want a little more adventure on their menu, there’s always the option of adding some unique flavors like spicy kebabs. This is the equivalent of adding some emerging markets fixed income to your bond portfolio.

    By Matt Tucker, CFA
  • uploads///US High Yield Bond Fund Flows
    Company & Industry Overviews

    High-Yield Bond Funds Witnessed Large Outflows

    Investor flows into high-yield bond funds were negative last week. According to Lipper, net outflows from high-yield bond funds totaled $1.8 billion.

    By Lynn Noah
  • uploads///SHY price vs NAV
    Macroeconomic Analysis

    When The Net Asset Value Of A Bond ETF Differs From Market Price

    The Intraday Indicative Value gives us a more real-time value than the bond ETF’s NAV. It’s considered an implied value of an ETF.

    By Matt Tucker, CFA
  • Financials

    Cyclical and structural unemployment in a recovering economy

    A major disagreement among Fed economists is how to classify unemployment in the economy. Unemployment can be caused by cyclical or structural factors. A number of Fed officials, including Janet Yellen, believe that there’s evidence of significant “labor market slack.” This is caused by cyclical factors.

    By Phalguni Soni
  • Consumer

    AAA and AA credit versus the below-investment-grade Sprint

    This article considers the trade-offs between high-quality, low-yielding fixed income opportunities and lower-quality higher yields in the current improving economic environment.

    By Marc Wiersum, MBA
  • uploads///High Yield Bond Yields Have a High Negative Correlation With Oil Prices
    Macroeconomic Analysis

    How Can You Add Carry to Your Portfolio?

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

    By Russ Koesterich, CFA
  • Technology & Communications

    Labor conditions: AAA credit versus the sub-investment-grade Sprint

    This article takes a closer look at the changes in the discouraged worker data and considers the implications for fixed income investors.

    By Marc Wiersum, MBA
  • Financials

    Must know: Why junk bond funds are in vogue again

    Secondary market activity in high yield debt mutual funds High yield debt (HYG) mutual funds recorded their second consecutive weekly inflow. Net flows into junk bond (JNK) funds came in at ~$1.6 billion in the week ending October 31. Net flows into high yield bond (PHB) mutual funds are down by ~$2.3 billion so far […]

    By Phalguni Soni
  • Healthcare

    Why is leverage a double-edged sword for companies like Apple?

    Corporate bond issuance in the U.S. reached $1.4 trillion in 2013, according to the Securities Industry and Financial Markets Association (SIFMA), a new record.

    By Phalguni Soni
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    Financials

    Why high yield bonds offer an investment opportunity

    High yield bonds have come under pressure lately, and as a result, are now looking relatively attractive. Spreads recently widened out to the highest level in a year.

    By Russ Koesterich, CFA
  • Consumer

    Why did new high yield bond issuance spike last week?

    High yield issuance last week rebounded sharply from the past two weeks’ lows. Issuers took advantage of strong market conditions for debt offered at relatively low borrowing costs.

    By Sandra Nathanson
  • Financials

    Why the Fed’s Dudley and Evans advise patience in lifting rates

    After the 2008 financial crisis and Great Recession, U.S. monetary policy has been designed to boost economic growth and create jobs. The Fed has kept the federal funds rate at near-zero levels since December 2008.

    By Phalguni Soni
  • uploads///High Yield Bonds Appear Relatively Attractive
    Macroeconomic Analysis

    Areas of Relative Value within Fixed Income

    For investors, the implications are not to load up on bonds, but to tactically look for areas of relative value within fixed income.

    By Russ Koesterich, CFA
  • uploads///inflation expectations
    Macroeconomic Analysis

    Current High Volatility Regime Will Likely Persist

    The high volatility regime will likely be the norm in the future. State Street observed that the US market has already clocked 42 highly volatile days in 2015.

    By Russ Koesterich, CFA
  • uploads///HY issuance
    Healthcare

    Why is the high yield bond market seeing so much fresh supply?

    Strong weeks of issuance signify an overall bullish market. High yield issuance for last week was at its strongest so far in 2014.

    By Sandra Nathanson
  • Financials

    Why asset classes reacted differently to September’s FOMC

    High-yield bond markets may have oversold ahead of the September FOMC statement. Recent trends in investor outflows from high-yield mutual funds suggest that investors are cautious.

    By Phalguni Soni
  • uploads///Price Movement in the VFINX and the JNK
    Financials

    US Stock Indexes Rally with Japan’s Stimulus and Robust Jobs Data

    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.

    By Lynn Noah
  • uploads///Ben_Bernanke_official_portrait
    Financials

    Who will replace Bernanke as the next Fed Chairman? (Part 3)

    Continued from Part 2 Because Bernanke will step down, there’s great speculation on who will replace him So who is it likely to be the next Bernanke? The case for Summers Between the two, Summers certainly has more excitement building around him than Yellen. Summers also has Wall Street credibility—at least more so than Yellen. […]

    By Dale A. Norton
  • uploads///Federal funds rate has remained low
    Macroeconomic Analysis

    Bonds Could Underperform In 2015

    Interest rates and bond yields are already at very low levels. Inflation could pick up and lead to a rate hike. So, bonds could underperform going forward.

    By Russ Koesterich, CFA
  • uploads///Junk Bond Yields in  and
    Company & Industry Overviews

    Prime Security Services Issued the Most Junk Bonds Last Week

    Prime Security Services is a subsidiary of Apollo Global Management (APO). It issued junk bonds worth $3.14 billion on April 20.

    By Lynn Noah
  • uploads///credit quality ANGL HYG
    Company & Industry Overviews

    Investors Look to Fallen Angel High Yield Bonds for Value

    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).

    By VanEck
  • uploads///bonds as ballast
    Macroeconomic Analysis

    Building with Buffer: The Case for Bonds

    Bonds and stocks are negatively correlated. This is why bonds can act as a ballast in your portfolio, and thus the case for bonds is still strong while building with buffer.

    By Dennis Stattman
  • uploads///HYEM
    Company & Industry Overviews

    How High Yield Emerging Market Bonds Can Offer Hidden Value

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

    By VanEck
  • Financials

    Recommendation: Look to select areas of emerging market debt

    Select areas of the EM debt sector hold good potential, as many of these countries exhibit low leverage levels and are currently funded through year-end.

    By Rick Rieder
  • uploads///energy companies share turmoil in high yield bond market
    Miscellaneous

    Plunging Oil Causes Turmoil In High Yield Bond Markets

    The turmoil in high yield bond markets has left more than 18% of junk bond issuers at distressed levels. Investors should avoid the scary junk bond segment.

    By Jeffrey Rosenberg
  • uploads///The Correlation Between Stocks and High Yield Bonds Has Increased Over the Last  Years
    Macroeconomic Analysis

    Why Higher Correlations Between Risky Assets Don’t Bode Well

    Increasing correlations between risky assets could leave your portfolio vulnerable.

    By Russ Koesterich, CFA
  • Energy & Utilities

    Why the issuance for high-yield bonds was dropped

    After rising sharply the previous week, the issuance for the high-yield bonds dropped to $8.6 billion for the week ending on May 16 compared to $10 billion for the week ending on May 9.

    By Mike Sonnenberg
  • uploads///Junk Bond Yields and Price Movement in JNK
    Financials

    US Stock Indexes Almost Flat after Release of FOMC Minutes

    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.

    By Lynn Noah
  • uploads///Sharpe Ratios
    Technology & Communications

    Risk-adjusted returns on high yield bond ETFs at par with the market

    Know how XLY outperformed rest of the ETFs on risk-adjusted basis, closely followed by DEF.

    By Alex Chamberlin
  • Macroeconomic Analysis

    Improving consumer confidence suggests better capital spending

    Consumer confidence, while low, is improving. During the first half of 2014, the Conference Board’s measure of consumer expectations averaged a little below 82, a material improvement from the previous four years.

    By Russ Koesterich, CFA
  • uploads///US High Yield Bond Market Issuance
    Company & Industry Overviews

    High-Yield Bond Issuance Rose Last Week

    The total US dollar-denominated issuance of high-yield debt stands at $56.9 billion YTD in 2016—29% lower compared to the same period in 2015.

    By Lynn Noah
  • uploads///markus spiske TfJqbBA unsplash
    Financials

    The difference between High Yield Bond ETFs and Investment Grade Bond ETFs

    The corporate bond market is divided into two broad categories: the high grade market and the high yield market.

    By Dale A. Norton
  • uploads///jorge salvador yNKahybhg unsplash
    Financials

    The Difference between Corporate Bonds and Treasuries

    Bond investors should understand the difference between Corporate Bonds and Treasuries. Below is a list of the key differences between the two.

    By Dale A. Norton
  • uploads///highyield
    Miscellaneous

    High-Yield Bonds Are Turning Out to Be the Real Winners

    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.

    By Matt Tucker, CFA
  • uploads///fedvolatility
    Macroeconomic Analysis

    Divided Opinions about the Fed’s Rate Hike Procrastination

    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.

    By Matt Tucker, CFA
  • uploads///Junk bond yields and the SP  are inversely related
    Financials

    Connection Between Equities And High Yield Bonds

    Equities and high yield bonds perform well when the economy is improving, and both underperform when the economy is slumping.

    By Matt Tucker, CFA
  • Financials

    Credit risk: Why high-yield bonds act like equities

    High-yield debt could do well, but there are risks. The Fed shifting toward more contractionary monetary policy poses two risks to high-yield debt.

    By James Malthus, Macro Analyst
  • uploads///US High Yield Bond Fund Flows
    Financials

    High yield bonds, the pain continues and will only get worse

    The fund flows for last week once again plummeted as investors remove cash from bonds ahead of the FOMC meeting. Fund flows are key in determining the sentiment of investors towards a given asset class. Weekly fund flows measure how much cash investors put into and remove from mutual funds focused on investing in high […]

    By Dale A. Norton
  • uploads///US High Yield Bond Fund Flows
    Financials

    High yield fund flows stumble, demand side may be getting weak

    High yield bond flows for last week posted the first outflow in five weeks, possibly signaling weak investor confidence Fund flows are the best indicator of investor demand in the high yield bond market. Naturally, an increase in investor demand is reflected in increased bond prices and lower yields. When demand falters, issuance is diminished […]

    By Dale A. Norton
  • Financials

    High yield debt issuance resurges in the primary market

    New issue volumes for high yield debt rose 13.3% week-over-week to $6.8 billion across nine issues in the week ending October 31. Issuance had come in at $6 billion across 12 deals in the week ended October 24.

    By Phalguni Soni
  • Financials

    An investor’s guide to the US leveraged financial market

    According to the Securities Industry and Financial Market Association, SIFMA, the total U.S. fixed income market size is about $38.6 trillion.

    By Sandra Nathanson
  • uploads///Ratings
    Financials

    Comparing leveraged loans and high yield bonds: Credit rating

    Credit rating measures the credit-worthiness of a debtor with respect to its financial and operational stability. Rating agencies such as Moody’s and Standard & Poor’s specialize in rating credit to government agencies and corporates.

    By Sandra Nathanson
  • Financials

    Comparing leveraged loans and high yield bonds: Key distinctions

    Leveraged loans (BKLN) are almost always secured or backed by a specific pledged asset or some form collateral. On the other hand, high yield bonds (JNK) may be secured or unsecured.

    By Sandra Nathanson
  • Financials

    Comparing leveraged loans and high yield bonds: Debt terms

    Another item that differentiates leveraged loans from high yield bonds is “covenants,” or the financial health metrics that issuers must adhere to.

    By Sandra Nathanson
  • uploads///Macaulay duration formula
    Financials

    Know how to calculate and interpret your bond’s duration

    Duration, in effect, takes into account various factors while providing with an assessment as to the price sensitivity of the bond to interest rate changes.

    By Surbhi Jain
  • uploads///Default Rate
    Financials

    The default rate and its relation to bond and loan prices

    Default rate is a key metric of credit risk and is defined as the risk that the counterparty will default on its financial obligations.

    By Alex Chamberlin
  • Financials

    Using sector rotation during rising interest rates

    So how can an investor use sector rotation during a rising rate period?  By rotating some assets out of fixed income sectors that tend to underperform in this kind of environment and into sectors that tend to benefit.  Typically during rising rate environments, the Fed is raising the federal funds rate in response to high […]

    By Russ Koesterich, CFA
  • uploads///Rating
    Financials

    Must know: How credit rating affects default rate and bond price

    A lower credit rating means higher risk, and therefore, higher yield as investors look for the premium to take the risk and vice versa.

    By Alex Chamberlin
  • Financials

    Key differences between high yield and investment-grade bonds

    Investment-grade corporate bonds (LQD) carry inferior yields compared to high yield bonds (JNK) with the same maturity date.

    By Sandra Nathanson
  • Financials

    Credit ratings in expansions affect companies like Thermo Fisher

    According to the National Bureau of Economic Research (or NBER), the trough of the recession was reached in June 2009, and the economy began expanding in Q3 2009.

    By Phalguni Soni
  • Financials

    Investors are interested in the long end of the Treasury curve

    In contrast to the three-week auction—where lower demand resulted in high yield—the U.S. ten-year Treasury note (TLT) auctioned on Wednesday, March 12, attracted the highest demand in a year.

    By Sandra Nathanson
  • Financials

    Why primary risk factors are important for fixed income investing

    A portfolio’s exposure to yield curve twists—non-parallel movements in the yields curve—can also be approximated by using the present value distribution of cash flows.

    By Phalguni Soni
  • Financials

    How high-yield bond markets react to higher market volatility

    High-yield debt mutual funds recorded a net outflow of ~$0.5 billion in the week ending October 17, reversing the previous week’s trend with net inflows of $1.3 billion.

    By Phalguni Soni
  • Financials

    Mester weighs in on using “sticky” prices in inflation models

    According to Mester, core price inflation in the services sector has ranged between 2.25% and 2.50% since 2012. A deceleration in core goods prices has resulted in headline inflation falling below the Fed’s long-term inflation goals.

    By Phalguni Soni
  • Financials

    Why revisions in inflation measures impact ETF investors

    In this part of the series, we’ll discuss Mester’s views on the second research question posed to the audience: how should monetary policy makers incorporate revisions to PCE inflation into their policymaking framework?

    By Phalguni Soni
  • Materials

    Why gold is a good diversifier for your portfolio

    But gold also does two other things, which make it worth having in the portfolio in small amounts. It’s diversifying as it behaves differently than paper assets

    By Russ Koesterich, CFA
  • Financials

    Corporate debt trends—have high yield investors had enough?

    However, corporate borrowers in the primary markets continued to take advantage of the low yields environment.

    By Phalguni Soni
  • Financials

    Analyzing secondary trends in high yield debt securities

    Investor flows into high yield (HYG) mutual funds reversed their trend in the week ended June 27. High yield (JNK) mutual funds recorded net inflows of $619 million in the week

    By Phalguni Soni
  • Financials

    Why the Fed’s closely watching the BLS and ADP payroll reports

    Few economic releases generate as much reaction from both stock (SPY)(IVV) and bond (BND) markets as the employment reports issued by Automatic Data Processing (or ADP) and the Bureau of Labor Statistics (or BLS).

    By Phalguni Soni
  • Financials

    Why bond investors are focusing on credit ratings and quality

    Due to the seasonal slowdown in July and August, investment-grade bond (LQD) issuance dropped by 33% to $16.7 billion last week. Leveraged loan issuance also increased. It spiked 141% week-over-week to $21.2 billion.

    By Phalguni Soni
  • Financials

    Comparative market performance of high-yield debt ETFs

    Bond yields and prices move in opposite directions. Due to the decrease in yields, returns on high-yield debt were positive in the week ending August 15. As mentioned in the previous part, junk bond yields decreased by 0.29% over the week ending August 15 to 5.63%.

    By Phalguni Soni
  • Financials

    Why the 5-year TIPS auction saw lower investor demand

    The U.S. Treasury auctioned five-year TIPS worth $16 billion on August 21—lower than the $18 billion auctioned in April. Despite lower issuance, demand for the securities was lower at 2.48x—compared to 2.70x for the April auction.

    By Phalguni Soni
  • Financials

    Emerging and advanced market divide impacts sovereign risk

    A financial or economic crisis in a foreign country could affect other countries included in the asset class or in the geographic area. Bond spreads could widen for other affected countries, despite the fact that their economic fundamentals were actually improving. This is especially true for emerging market debt.

    By Phalguni Soni
  • Financials

    Why are hedge funds holding out on Argentina?

    Argentina’s default led to significant shock waves in international financial markets, including the S&P 500 Index (SPY), the NASDAQ-100 (QQQ), and the Dow Jones Industrial Average (DIA). It also led to a 0.52% spike in junk bond (JNK) yields in one week.

    By Phalguni Soni
  • Financials

    Corporate debt reacts to FOMC minutes and Europe’s banking stress

    The release of the Fed’s Federal Open Market Committee (or FOMC) minutes for the June meeting, exerted a considerable influence over debt markets (AGG) last week.

    By Phalguni Soni
  • Financials

    Must-know: Investing in the PIIGS nations

    The PIIGS nations are Eurozone’s most troubled economies. Considering historical and recent economic developments in these nations, most of them have been in serious financial trouble in regards to sovereign debt. The trouble with the PIIGS nations and the Eurozone economies lies in their monetary union.

    By Surbhi Jain
  • Financials

    Why high-yield debt funds see record outflows and bonds rally

    While investment-grade bonds funds benefited from rising market jitters, high-yield bond funds bore the brunt. Last week, investors pulled a record $7.1 billion from high-yield bond funds—the largest weekly outflow ever.

    By Phalguni Soni
  • Financials

    Must-know: High yield bonds are risky and costly

    One of the reasons why fixed income investing has been greatly favored by investors is because bonds help diversify the risk that comes from a pure equity portfolio.

    By Russ Koesterich, CFA
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