Sentences with phrase «of higher yielding bonds»

Yield blindness or stated another way, the insatiable search for yield coupled with the low supply of higher yielding bonds has kept many weaker credits including Illinois from seeing higher spreads.

In a different environment, or for financially secure companies, is it ever a good idea to make a leveraged buy of higher yielding bonds, where the bond sells at a discount and the coupon is greater than the margin interest rate?

Compare that to the holder of a high yield bond who can ignore the ravings of Mr. Market and sit tight until normality returns.

Because credit and default risk are the dominant drivers of valuations of high yield bonds, changes in market interest rates are relatively less important.

High yield (HY) spreads — the difference between the yield of a high yield bond and a Treasury note of similar duration — are down 2 percentage points from their February peak, as investors buy high yield bonds.

This is why as soon as WeWork, the US shared office space company, said it wanted to issue $ 500 million of high yield bonds, we saw morale perk up and investors dive into the new issuance.

While the underperformance of high yield bonds since my post The Case Against High Yield has certainly made high yield bonds more attractive (yields went from sub 6 % to north of 8 %), I still prefer the risk / return profile of a stock / bond allocation (more here).

They also have sensitivity to interest rates, so as interest rates rise, the value of a high yield bond can decline, and vice versa.

Like equity, the value of a high yield bond is tied to the fate of its corporate issuer.

They also have sensitivity to interest rates, so as interest rates rise, the value of a high yield bond can decline, and vice versa.

The fund started out with the idea of giving investors access to a diversified portfolio of high yield bonds on the stock market.

Spreads (the difference between the yield of a high yield bond and a U.S. Treasury) have come in considerably since the winter lows.

Spread curves of high yield bonds tend to invert when the Treasury yield curve is steeply sloped.

Chris began his career at Wellington Management in 1994 as a research analyst in Fixed Income Research, specializing in the quantitative and qualitative review of high yield bonds.

While the portfolio of high yield bonds may offer additional return potential, high yield bonds are subject to substantial interest rate risk.

The long high yield corporate bond positions included in the index are designed to represent the more liquid universe of high yield bonds for sale within the United States.

By taking such short positions, the index seeks to mitigate the potential negative impact of rising Treasury interest rates («interest rates») on the performance of high yield bonds (conversely limiting the potential positive impact of falling interest rates).

Consider some figures based on our analysis: The whole universe of high yield bonds is only around $ 2 trillion and the emerging market (EM) sovereign debt universe measures around $ 6 trillion, while the world of negatively yielding developed market government debt measures roughly $ 13 trillion, according to our estimates of figures from multiple sources.

The short positions are not intended to mitigate other factors influencing the price of high yield bonds, such as credit risk, which may have a greater impact than rising or falling interest rates.

HYHG maintains a diversified portfolio of high yield bonds to generate returns.

Consider the increasingly risky world of high yield bonds.

We love high yield corporate bonds; they pay a lot more interest than treasuries and also because these are not the greatest borrowers — I'm not talking little companies; think CitiBank and other very big companies that don't have a pristine credit rating — they can not lend money out very long so the maturities of our high yield bond fund is closer in.

Since 1997, a two - factor model incorporating the Chicago Fed National Activity Index (CFNAI) and high yield spreads (the difference between the yield of a high yield bond and that of the 10 - year U.S. Treasury) explained nearly 60 % of the variation in the VIX.

Because the yields of high yield bonds are so high, this is not a time to abandon aggressive strategies.

The American Century High Income Fund has typically invested at least 80 % of net assets in a portfolio of high yield bonds generally rated below investment grade by Moody's Investors Services, Standard & Poor's (S&P) Rating Services or Fitch.

We would need to see a desire for greater risk through greater pursuit of high yield bonds at the expense of treasuries.

HYHG maintains full exposure to the credit risk of high yield bonds as a primary source of return, while the hedge is designed to alleviate the impact of rising rates.

(TheStreet.com: Aug 13, 2013) TheStreet.com presents a profile of ProShares High Yield — Interest Rate Hedged ETF (HYHG) as a fund that targets the returns of the high yield bond market while hedging against interest rate risk.

ProShares High Yield — Interest Rate Hedged (HYHG) tracks the Citi High Yield (Treasury Rate - Hedged) Index, which offers a diversified portfolio of high yield bonds with a built - in interest rate hedge.

«Many investors have been attracted to the income of high yield bonds but are concerned about rising rates,» said Michael Sapir, Chairman and CEO of ProShare Advisors LLC.

Only 3.4 % of high yield bond issuers have historically been unable to pay back their bond holders, but when they are unable to pay, bond holders have typically recovered a little less than half of their investment.

In fact, a 2001 study by Elton, Gruber, and Agrawal found that the expected returns of high yield bonds can mostly be explained by equity returns.

What do you think of high yield bonds?

Senior loans rank higher in the capital structure and are secured to the assets of the business, unlike the unsecured nature of high yield bonds.

The index does not attempt to mitigate other factors influencing the price of high yield bonds, such as credit risk, which may have a greater impact on high yield bond prices than changes in interest rates.

The index seeks to provide diversified exposure to a liquid portfolio of high yield bonds while seeking to mitigate the impact of interest rate movements.

The value of high yield bonds — like that of all bonds — can be negatively affected by rising rates.

Below we highlight a six - month performance chart of the high yield bond ETF (HYG) and the investment grade corporate bond ETF (LQD).

Not exact matches

The Canadian dollar fell 0.6 of a cent to 97.34 cents US as the U.S. dollar and bond yields headed higher after the announcement.

LONDON, April 23 - Hamstrung by a renewed slump in volatility and lack of clear market direction, FX and bond speculators are making historically big bets on a lower dollar and higher yields.

If interest rates rise and push that risk - free rate of return higher, then those dividend stocks and high - yield bonds are vulnerable.

If you take the view that few if any of Trump's proposals will play out as hoped, Fehr recommends a defensive positioning, with a heavy weighting to bonds and large - capitalization, high - yielding stocks such as telecoms, utilities and consumer staples.

Bond fund managers Jeffrey Aronson, Michael Vranos, and Boaz Weinstein discuss why they think high - yield market is showing signs of a bubble.

When we talk about bond market liquidity it's important to understand that there are lots of different «pools» out there such as high yield bonds, munis, government bonds, etc..

The bonds of iHeartMedia have long been in the basket of «distressed debt,» meaning their prices have fallen so far to where their yields are at least 10 percentage points higher than equivalent Treasury yields.

And they're going to pass them onto you and me as consumers, and that will push some of the inflation data higher, with some bond - yield reaction to it.

(Bond yields move inversely with bond prices, and rising yields tend to signal expectations of higher growth and inflation ahead and, therefore, higher interest ratBond yields move inversely with bond prices, and rising yields tend to signal expectations of higher growth and inflation ahead and, therefore, higher interest ratbond prices, and rising yields tend to signal expectations of higher growth and inflation ahead and, therefore, higher interest rates.)

The benchmark 10 - year yield hit a high of 2.626 % on March 13, briefly ticking above the 2.60 % threshold that the bond - market veteran Bill Gross had said was «much more important than Dow 20,000.»

Also, as bond rates rise, some of the money that migrated over from the bond market in search of higher yields will return to the safety of fixed income.

While investors will have to find stocks with higher yields, pay more for them and take on more risk in bonds, the biggest change in a permanently low - rate world is that people will need to set aside more of every paycheque if they want to keep the same goal for retirement income.