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...That compares to a yield of roughly 9.15 per cent on the average single B rated US corporate bond, ICE bond index data shows....
...“We still really like high-yield corporates, but we also like BBB corporates,” Bianco said....
...Until the recent Kenya deal, the “green-shoot” issuance observed to date has come from credits that have long traded well below the average yields of the B-rated bucket of the [JPMorgan dollar EM bond index...
...Sure, a CCC-rated PIK bond looks better than a defaulted bond in your portfolio. But, as S&P puts it when explaining why U.S....
...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?...
...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....
...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?...
...The solid blue line shows actual returns on HY, which broadly tracks double-B bond yields (solid black), the highest-quality rung of HY....
...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....
...And it’s almost always worth it to cut out unnecessary fees for standardised investment products like Treasuries or index funds....
...McManus said that in Nutmeg’s view, the biggest risk to US equities was a rise in bond yields....
...In contrast, high-yield bonds returned 11 per cent, senior loans 10 per cent and convertible bonds, an equity-fixed income hybrid, also 10 per cent....
...In addition the high-yield injunction protected the fund from exposure to the most overvalued (and thus low-yielding) companies in the boom....
...Even after a partial reversal in the first few days of January, the average yield on an index of US junk bonds still hovers at roughly 8 per cent, according to Ice BofA data, compared with 9.4 per cent as...
...A record $1.2bn has flowed in to European-listed exchange traded funds investing in the region’s high-yield bonds this year to Thursday, according to BlackRock data....
...The weakest slice of companies (light green bars below) takes up a historically normal share of the high-yield universe, according to Moody’s: What about equity investors?...
...The S&P 500 is within a per cent or two of taking out the all-time high it set in late 2021. Most bond funds are likely to end the year with gains, too....
...“The US is running a budget deficit of 7 per cent — for [a] non recessionary period that’s very high,” said Jim Leaviss, fund manager at M&G, the asset manager....
...Puzzle #3: Why should non-bond-nerds care? The third and final puzzle is why any of this might be at all interesting....
...But when money is instead borrowed to pay ever rising interest expense, consider who is on the receiving end: duration-matching investors, bond funds, foreign governments....
...Bonds too. Is it the end of the world, or is it just August? Some of both? Email us: robert.armstrong@ft.com and ethan.wu@ft.com. Bonds Everywhere you look, long bond yields are busting out....
...We haven’t mentioned the B-word yet. Bonds....
...We know how to compute the yield to maturity on bonds....
...If you wait for the perfect moment, when pension fund values are high and annuity rates are peaking, it may never happen....
...At $1.4tn, the US leveraged loan market is now worth slightly more than its high-yield bond market and accounts for much of the non-investment grade debt that is due to mature over the coming five years....
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