The secondary
market for corporate bonds may be less active than the market for ordinary shares, making it harder for the ETF issuer to sell its bond investments.
You can check a company's default risk by looking at its bond ratings, which is the equivalent of a credit
report for corporate bonds.
Investment Philosophy In practice, an active portfolio manager
for a corporate bond mandate mostly focuses on credit returns, specializing in expressing views on the direction of credit spreads and security selection.
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.
This cautious outlook aligns with Morgan Stanley's 2018 forecast, which called for negative returns
for corporate bonds in the US, Europe, and Asia.
Buying and holding Baa corporate bonds (BBB for those speaking the language of S&P or Fitch) has always been the high returning
option for corporate bonds.
There is no electronic trading mandate
for corporate bonds of course, but a proliferation of new bond trading platforms and initiatives is upon us akin to...
DTS is an industry - accepted measure of credit
risk for corporate bonds, and is calculated by multiplying spread duration and OAS (see Equation 2).
Preferred shares can be an excellent
substitute for corporate bonds in taxable portfolios, as explained in my earlier publication Why Invest in Preferred Shares?
Legg Mason plans to close a deal this month to restructure $ 650 million in debt, a move designed to lock in favorable interest rates for the long term while taking advantage of the market's sustained
appetite for corporate bonds.
For example, on 11 December 2015, the onset of the high yield crisis, HYG traded $ 4.3 billion, the most
ever for a corporate bond exchange - traded fund (ETF).7
And what goes for the stock here, goes
triple for the corporate bonds, where you have all of the downside of the stock, and little of the upside, if the company should manage to survive.
He also compares the relative prospects of US and European shares, the likelihood of the DKK decoupling from the Euro, inflation expectations and recent
developments for corporate bonds.
The new administration has signaled policies such as tax cuts, increased Treasury issuance and reduced regulation that many investors believe could result in higher interest rates, higher inflation and a favorable
environment for corporate bonds.
Canso's investment team is comprised of five portfolio managers and credit analysts, who have demonstrated a solid track
record for corporate bond mandates.
Exhibit 2 shows the historical outstanding par amounts in the respective indices, showing an increase to INR 48 trillion from INR 21 trillion for government bonds and to INR 6 trillion from INR 4 trillion
for corporate bonds from November 2008 to Jan. 1, 2015.
Please note that these ratings are determined by the DBRS, a renowned rating agency, and can be found when you search for bonds in our inventory (available
only for corporate bonds).
Although it is fair to say that the recent uptick in volatility has in part reduced earlier concerns about prolonged low volatility and associated reach - for - yield behavior, it has placed added focus on the resilience of liquidity, particularly in markets, such as the
market for corporate bonds, that may be prone to gapping between liquidity demand and supply in stressed conditions.
The
demand for corporate bonds has been very high and corporate issuers have met demand as mentioned in Tim Sturrock's article Global Fixed Income Investors Flock to Corporate Bonds.
This benchmark rate is used for all kinds of purposes, including figuring out a fair
price for corporate bonds, valuing stocks, forecasting inflation and pricing mortgages.
Interest
rates for corporate bonds, treasuries, the yield curve, real money supply, real estate loans, mortgage rates, purchase and refinance mortgage applications are positive.