The corporate bond sector of the municipal bond market has historically been one of the sectors where bonds have a higher propensity to default.
Specifically for
the corporate bond sector, China lagged its U.S. counterpart.
The corporate bond sector has also gained an increasing market share of the overall Chinese bond market; it rose from less than 10 % to 33 % over the period studied, see the exhibit below.
The corporate bond sector Read more -LSB-...]
This is a problem for more than the US
corporate bond sector.
Not exact matches
As the business
sector accumulates more surplus cash, it has the effect of driving down interest rates because there's less demand for
corporate bonds and other forms of business lending.
As oil prices have fallen, defaults in the
sector have risen — about a quarter of all
corporate bond defaults in 2015 were energy related, according to Moody's — and that's made traders even more reluctant to buy.
This is due to the fact that the reduction in private
sector held government
bond supply has been reduced which has shifted demand onto the
corporate and muni markets.
Invest in high - yield
bonds and dividend - yielding stocks, says the BofA - Merrill team, which is overweight high - grade and high - yield
corporate bonds, including financial
sector names that are especially sensitive to the housing market.
In most other countries with which we normally like to compare our financial markets, the
corporate sector makes greater use of
bond funding.
Each fund has a stated objective, generally focusing on a particular
sector, such as
corporate or Treasury
bonds, or broad category, such as investment grade or high yield.
Represents the
corporate and government - related
sectors of Bloomberg Barclays Global Aggregate
Bond Index (which provides a broad - based measure of the global investment - grade, fixed - rate debt markets) and is considered representative of global investment - grade debt.
Certain types of
bond funds, such as broad market
bond funds, are also diversified across
bond sectors, providing exposure to
corporate, U.S. government, government agency and mortgage - backed
bonds.
Sector risk
Corporate bond issuers fall into four main
sectors: industrial, financial, utilities, and transportation.
Issuers from the
Corporate sector represent for example 32 % of the green
bond universe vs 18 % in the Bloomberg Barclays Global Aggregate Index.
This asset class is spread across a large number of securities, like the
corporate bond market, though there are a number of risk factors that are unique to the
sector.
The major
bond market segment that most investors concentrate on is the high - quality
sector: U.S. government
bonds, high - grade
corporate bonds and high - grade municipals.
In terms of equities, the S&P 500 had its best month in four years in October, while booming
corporate bond sales continued to meet high demand, appearing to reflect confidence in the strength of the US
corporate sector as well as the persistence of low market interest rates.
These concerns might recently have been exacerbated by changes in the pattern of
corporate financing: in countries in which the swap spread has increased the most — the US and UK — growth in private
sector bond issuance has been relatively large, while net equity issuance has been low (or even negative as in the United States).
We have government debt,
corporate debt, and a much larger Fed balance sheet (which, some people argue, drove
bond buying by the public), but those are offset by a significant deleveraging in household and financial
sector debt.
In the U.S. 80 percent of
corporate funding is from
corporate bonds, but high - yield
bonds are a small sub-set, making up around 10 percent of the
sector.
But
sectors are also just one consideration in a well - diversified portfolio, which can have a mix of domestic, foreign, small -, mid - and large - sized company stocks as well as investment - grade
corporate and government
bonds.
Eligible
sectors include U.S. Treasurys, global government - related
bonds, global investment - grade and high yield
corporate bonds, and emerging market
bonds.
This reduced call by the Government has opened up the market to private
sector borrowers; issues of
corporate bonds over the past year were the highest since 1991.
Finance economists have argued that such a high discount rate is imprudent, however, and there have been signs that public accounting standards might move toward the private -
sector rules, based on
corporate bond and Treasury rates, which could reduce the discount rate to about 5 percent.
Fixed income
sectors shown to the right are provided by Barclays and are represented by the following Bloomberg Barclays Indices — Treasury Inflation Protected Securities: U.S. Treasury Inflation - Protected Securities (TIPS) Index; Floating Rate Loans: US Floating - Rate Note Index (BBB); Asset - backed securities: US Asset - Backed Securities Index; High Yield: US
Corporate High - Yield
Bond Index; Convertibles: US Convertible
Bond Index; Mortgage - backed securities: US Aggregate Securitized MBS Index; Broad Market: US Aggregate
Bond Index; Municipals: Municipal
Bond 10 - Year Index; Investment Grade
Corporates: US
Corporates Index
The S&P 500
Bond Index has returned a modestly negative total return of -0.31 % year - to - date while the energy bond sector tracked in the S&P 500 Energy Corporate Bond Index is down 5.79 % year - to - d
Bond Index has returned a modestly negative total return of -0.31 % year - to - date while the energy
bond sector tracked in the S&P 500 Energy Corporate Bond Index is down 5.79 % year - to - d
bond sector tracked in the S&P 500 Energy
Corporate Bond Index is down 5.79 % year - to - d
Bond Index is down 5.79 % year - to - date.
The back - tested results of the 17 - year period ending Feb. 28, 2017, show that the S&P U.S. High Yield Low Volatility
Corporate Bond Index may offer an intersection that bridges the volatility gap between the high - yield and investment - grade bond sectors, with increased return efficie
Bond Index may offer an intersection that bridges the volatility gap between the high - yield and investment - grade
bond sectors, with increased return efficie
bond sectors, with increased return efficiency.
While the
corporate sector is relatively small in Australian
bond market, the size actually grew more than 80 % since the Read more -LSB-...]
The fact that the S&P U.S. High Yield Low Volatility
Corporate Bond Index is located above the straight line linking the investment - grade and high - yield bond sectors demonstrates that the index outperforms the return frontier established by the two bond sect
Bond Index is located above the straight line linking the investment - grade and high - yield
bond sectors demonstrates that the index outperforms the return frontier established by the two bond sect
bond sectors demonstrates that the index outperforms the return frontier established by the two
bond sect
bond sectors.
As expected, the S&P U.S. High Yield Low Volatility
Corporate Bond Index sat between the high - yield and investment - grade bond sectors in the volatility spect
Bond Index sat between the high - yield and investment - grade
bond sectors in the volatility spect
bond sectors in the volatility spectrum.
Looking both within and outside of the benchmark, the Fund seeks relative value opportunities across traditional investment - grade and high - yield
bond sectors, also including nontraditional asset classes like non-U.S. sovereign and
corporate debt, convertibles, and floating - rate loans.
This asset class is spread across a large number of securities, like the
corporate bond market, though there are a number of risk factors that are unique to the
sector.
Taxable municipal
bonds offer yields comparable to those of other taxable
sectors, such as
corporate bonds.
The low interest rates that the Fed supports for high quality
bonds indirectly attempts to overleverage the
corporate sector in the same way that they overlevered the consumers through housing 2003 - 2007.
The debt portion of the fund favors
corporate bonds but spreads its exposure around to multiple
sectors.
Pursuing income with an all - weather
bond portfolioDiverse opportunities: The fund invests across all
sectors of the U.S.
bond market, including mortgage - backed,
corporate, and government
bonds.A flexible strategy: The portfolio managers pursue an attractive level of income, adjusting the portfolio to favor attractive
sectors as interest rates and market conditions change.Leading research: The managers, supported by Putnam's fixed - income research division, analyze a range of
bonds to build a competitive portfolio.
Like equity indexes,
bond indexes typically target a specific part of the market — such as a specific
sector (e.g. Treasuries,
corporates), credit rating (e.g. Aaa - A), or maturity range (e.g. 7 - 10 years).
This flight to quality movement also impacted credit spreads, which widened for both investment grade and high yield
corporate bonds, negatively impacting the returns of
bonds in those
sectors.
Choosing
bonds of different types (government, agency,
corporate, municipal, mortgage - backed securities, etc.) creates protection from the possibility of losses in any particular market
sector.
The financials
sector makes up close to 40 per cent of the FTSE TMX Canada All
Corporate Bond Index, leaving it potentially vulnerable to wider bank spreads.
This is a broad index representing the U.S. Government, mortgage - backed,
corporate, and foreign government
sectors of the U.S.
bond market.
Within the other
corporate sectors, utilities (including electric and water companies) represented 6.2 % of total
bond exposure, while consumer products and services (such as retail, home furnishings, food products and services) represented 5.3 % of total
bond exposure.
And, within the
bond sector, the largest type across all three years was
corporate bonds, ranging between approximately 43 % and 48 % of total
bond investments.
Even more interesting is the
sector breakdown of the
bond types, particularly for
corporate bonds.
EHI's assets are largely foreign
corporate and government
bonds that span a diverse range of
sectors and countries.
The return of the S&P U.S. Issued High Yield
Corporate Bond Index ex energy and materials
sectors would be less affected, returning -2.14 % for the month and -0.05 % YTD.
Each fund has a stated objective, generally focusing on a particular
sector, such as
corporate or Treasury
bonds, or broad category, such as investment grade or high yield.
The emerging markets and commodity - related
sectors in the
corporate bond market should also benefit from a reflationary world.
Similar issues arise for callable
bonds in the American municipal,
corporate, and government agency
sectors.