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...Bond fund giant Pimco is holding a smaller than usual position in US Treasuries and prefers the bonds of countries such as the UK and Canada, as it believes inflationary pressures may lead the Federal Reserve...
...“We still really like high-yield corporates, but we also like BBB corporates,” Bianco said....
...High-yield issuance has also accelerated, rising 64 per cent year-on-year to $62bn — the highest total in three years....
...On the other hand, even risk-free global rates are high....
...Their emphasis below: When there was just one index fund, it was of limited use to market participants seeking to construct portfolios of evolving allocations between global asset classes and market segments...
...Investment-grade borrowers posted a record January for bond sales, while high-yield or “junk” volumes reached a two-year high, as finance chiefs took advantage of a drop in yields to borrow at more attractive...
...Monetary Fund....
...Enter the relatively new CG UK Index-Linked Bond Fund with costs of 0.15 per cent — an actively managed fund close to the price of a passive fund....
...The shift in rate expectations has hit bond markets, with yields, which move inversely to prices, rising sharply....
...So a new report from S&P Global Ratings on payment-in-kind bonds – aka PIKs – is going to really irritate them....
...Do I want to take, say, double B credit risk for another 1.9 per cent of yield on top of that, especially when high-yield default rates, while low, are rising?...
...EFPR Global data indicates that net fixed income fund inflows have now crossed the $100bn mark — and, luckily for all bond managers, active flows are outpacing passive ones so far in 2024....
...The solid blue line shows actual returns on HY, which broadly tracks double-B bond yields (solid black), the highest-quality rung of HY....
...Despite a rally on Friday as tensions in the Middle East pushed investors into safe assets, expectations for rates to remain high for some time have triggered a global bond sell off, pushing up government...
...This emphasis on selection may prove difficult for passive funds, which do not actively choose their holdings, but include every stock or bond in an index....
...However, the overwhelming bulk of the assets will be invested in an actively managed portfolio of bonds, much of it in relatively high-yielding bank loans, high-yield bonds and emerging markets debt, to...
...US equities markets fell sharply as Treasury yields rose, with the pain concentrated among interest rate-sensitive tech stocks. The S&P 500 index was 1.2 per cent lower....
...For more than a century, the dividend yield of the US stock market was virtually always greater than what you could get from high-grade bonds....
...High and volatile US treasury yields — which underpin pricing in financial markets — risk adding to global rate pressures....
...But if I showed you a bond that was win two, lose one, that’s a better bond! Markets adjust to that bond’s positive convexity, though, so you’d get paid less yield. But how much less yield?...
...Last autumn, Treasury yields hit a 16-year high....
...The IMF noted that “large and sudden increases” in US borrowing costs typically lead to surges in government bond yields across the world and exchange rate turbulence in emerging market and developing economies...
...In 2019 the JPMorgan index committee, following a consultation process, changed rules that had prevented high-income gulf states from having their sovereign bonds included in the EMBI Global range of benchmarks...
...Triple-B [the lowest rung of IG] spreads are at about 120bp, whereas double-B high-yield is at 200bp. So you pick up 80bp from going from triple-B to double-B....
...This is an audio transcript of the Unhedged podcast episode: ‘High-yield bond bonanza’ [MUSIC PLAYING] Ethan WuCorporate bonds — debt issued by companies — they’re red-hot right now....
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