PowerShares Fundamental HiYld CorpBd ETF
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 […]
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 […]
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.
Why Richard Bernstein Sees Risk in ‘Safe’ Investments
Richard Bernstein believes that investors’ flocking to fixed-income products and shunning equities has increased their risk.
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.
Why Is ‘Carry’ Compressed in Financial Markets?
In his investment outlook for June 2016, Bill Gross asserted that “carry” is compressed in nearly every form. It has more risk than return.
High-Yield Bonds in Light of Equity Market Movement
High-yield bond issuers have been cautious about raising debt. Until the week to April 18, the issuance of high-yield bonds fell 54% compared to last year.
Inflows Continued into High-Yield Bond Funds, Yields Fell Sharply
Investor flows into high-yield bond funds were positive for the fifth week. Net inflows into high-yield bond funds totaled $1.7 billion in the week ending March 16.
Outflows in High-Yield Funds Fell, Yield on High-Yield Bonds Rose
Investor flows in high-yield bond funds were negative last week. According to Lipper, the net outflows from high-yield bond funds totaled $0.5 billion.
October Saw Generous Inflows for High-Yield Bond Funds
According to Lipper, net inflows for high-yield bond funds totaled $7.6 billion through October 28, compared to outflows totaling $1.9 billion in September.
The Management Of Bond ETFs Versus Equity ETFs
The management of bond ETFs is a more complex task that involves sampling representative bonds from a given index.
Why high yield debt is staging a comeback in the capital markets
Issuance in high yield or junk bond markets has staged a recovery over the past three weeks as market conditions strengthened.
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 […]
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.
Why falling junk bond yields aren’t benefiting all issuers
Yields on high yield debt decreased by 24 basis points or 0.24% over the week ending October 24, to come in at 5.98%.
Must-know: Good news for high yield debt ETFs
Major U.S. stock indices like the S&P 500 Index and the NASDAQ-100 posted some very large gains in the week ending October 24.
Must-read: How to invest in unconstrained bond funds
There are a number of options available to those interested in investing in these funds. We’ll look at the key fund characteristics of the more prominent players. But investors are advised to read the respective fund prospectuses for more details.
How will continued investor exits affect senior loan funds?
Last week marked the fourteenth straight week of outflows from leveraged loan mutual funds.
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.
Analyzing the current opportunities and risks in junk-rated debt
Higher volatility in markets often helps in establishing a new price equilibrium, which may be especially true of high-yield bonds.
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.
Why the bull run in stocks affected high-yield bond markets
When the economy is expanding, corporate revenues and profits increase. Corporate delinquencies usually fall and the high-yield debt issuers’ debt-coverage ratios improve.
Must-know: Key return drivers for high-yield bond ETFs
High-yield or junk bonds are issued by borrowers that have a lower ability to service their debt obligations. They’re rated BB+ and below—according to Standard & Poor’s credit ratings system.
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.
Must know: Will leveraged loan ETFs soon outperform high yield bond ETFs
Although high yield bonds have historically fetched good returns for their investors, yields seem to show a declining trend.
Why high yield bond issuance has maintained its strong momentum
Last week’s high yield market The high yield market was very busy last week. A total of 20 transactions priced a total of $10 billion, slightly down from the $13 billion that rushed the market the week before the Fed’s announcement of delaying tapering. Year-to-date, the issuance is $241 billion—which is just in line with […]
Downside potential in September for high-yield bonds
The high yield market had what may have been its last strong week of the year The issuance volume for last week was a continuation of the strong issuance seen throughout July. It would be unusual, though, for this trend to continue into August. Volumes continue steady, flows rebound A total of 19 deals priced […]
Why leveraged loans have followed high yield bonds (Part 1)
If high duration drove the bond sell-off, why did loans follow suit? High yield bonds and leveraged loans are the two main asset classes composing the sub-investment grade called “fixed-income debt capital markets.” High yield bonds are defined as bonds rated below BBB-, and leveraged loans are those paying over L+125 basis points or rated […]
High yield bleeding slows, but is there anything left to drain out?
In just four weeks, the high yield bond flows amounted $9 billion in outflows. Fund flows are a good gauge of investor sentiment towards an asset class. Large outflows, such as the $900 billion one four weeks ago, should have been a good enough warning sign that something was going on, even if you were […]
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 […]
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 […]
Pack your bags, the high yield party is over!
The high yield market had its largest ever weekly outflow Fund flows are strong indicators of investor confidence and offer insight into changing views within the investor community. Whether it is sharp reversals or steady flows, the weekly flows are important to understand the weight investors assign to different market events and changing conditions. Last […]
High yield issuance closes May with a nose-dive!
After three relatively strong weeks, issuance fell to the lowest weekly value of the year. Issuance is important as a gauge of the market for two reasons: corporations prefer issuing when they feel the market is strong and new issues trigger a relative repricing of existing bonds in the market. Only eight deals printed last […]
Leveraged loans bounce back aggressively
After three weeks of declining issuance, leveraged loan issuance doubled In the below investment grade fixed income markets, bonds and loans are priced relative to similar issues. This relative pricing nature can lead to price increases when issuance increases. Strong issuance when investor demand is high leads to lower yields, which leads to a repricing […]
Leveraged loan volume continues steady decline, refi cycle over?
While yields continue pushing lower, volume is starting to slow down, which may affect the performance of leveraged loans in coming months. Weekly loan volume is a valuable gauge of the activity in the leveraged loan market. The volume represents the new supply of loans to the secondary market. The existing supply is affected by […]
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 […]
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 […]
Leveraged loan ETFs received largest weekly inflow year to date
Data from Lipper showed that 1/3 of the $1.1 billion inflows last week were into ETFs Fund flows are important gauges of investor interest in an asset class. A common measure is the weekly fund flows into mutual funds and ETFs. Recently, the interest in leveraged loan ETFs has increased significantly, which means these funds […]