It's kind of like a high
quality high yield bond.
We favor a selective approach to metals and mining companies» debt, with a preference for higher -
quality high yield bonds.
In it I argued that higher
quality high yield bonds were overvalued, but that CCCs might still have some play.
Not exact matches
The assumed discount rate utilized is based on a broad sample of Moody's
high quality corporate
bond yields as of the measurement date.
In the credit markets, both investment - grade and
high -
yield corporate
bonds had negative returns for the first time in eight quarters, with down - in -
quality subsectors in each unconventionally outperforming
higher quality ones.
A
high quality muni -
bond portfolio can
yield close to 4 % tax free, with inflation essentially not existent and equities at an all time
high I'm curious if there is a flaw in my logic?
Compared to
high -
quality bonds, both dividend stocks and
high -
yield bonds have historically had
higher volatility overall and
higher correlation to the overall stock market.
In other words, equity dividends are
higher by a third of a percentage points than
quality bond yields, and that's before the dividend tax credit and before any capital gains.
Although the
bond market is also volatile, lower -
quality debt securities, including leveraged loans, generally offer
higher yields compared with investment - grade securities, but also involve greater risk of default or price changes.
So while these «fallen angel»
bonds have the potential to be intrinsically
higher quality than debt originally issued at the junk or
high -
yield level, undue structural selling pressure from the downgrade can cause them to sell at a discount.
The
High Yield Bond Fund is a concentrated portfolio made up of liquid securities, focused on high quality non-investment grade bonds with strong cash fl
High Yield Bond Fund is a concentrated portfolio made up of liquid securities, focused on
high quality non-investment grade bonds with strong cash fl
high quality non-investment grade
bonds with strong cash flows.
Small stocks and many international stocks don't pay much income; income from
high -
yield and foreign
bonds may be
higher than for
high -
quality bonds, but also more variable.
Further out in the credit
quality spectrum, U.S. - based
high -
yield «junk»
bond funds
On average,
high -
quality corporate
bonds currently have
yields that are at least one percentage point
higher than Treasury
bonds.
The market's continuing refusal to countenance the long - term reality described above has proven to be a recurring source of profits for those who are willing to buck the crowd and embrace the trend in falling long - term
bond yields of the
highest quality borrowers.
The minimal dividends from traditional CDs and
high -
quality Treasury
bonds leaves little to be desired when compared to corporate or municipal debt
yielding magnitudes of greater income.
, but I think it's a mistake for risk averse or diversified investors to completely give up on
high quality bonds because they're worried about poor returns from low
yields.
-- Income more difficult to provide clients, in a zero rate environment many will suggest
high yield corporate
bonds and leveraged loans to supplement traditional fixed income but many clients are not willing to sacrifice
quality for a
higher yield.
This is a market - based estimate of the amount of fear in the
bond market Bass - rated
bonds are the lowest
quality bonds that are considered investment - grade, rather than
high -
yield.
Yet low nominal gross domestic product growth and aging populations argue for lower
bond yields than in the past — and sustained demand for
high quality bonds.
High Yield bond portfolios concentrate on lower -
quality bonds, which are riskier than those of
higher -
quality companies.
NOTE:
High -
yield bonds are subject to additional risks, such as increased risk of default and greater volatility, because of the lower credit
quality of the issues.
High -
yield bonds are issued by corporations with lower credit
quality ratings.
The result is a selection of
bonds with
higher volatility, lower credit
quality, and
higher yield than the broader
high -
yield market.
We favor a more even
yield - curve exposure today (with positions across maturities) and a more defensive (
higher -
quality) credit profile — as volatility and heightened credit concerns could lead to significantly wider spreads in the
high -
yield -
bond market.
For example, the
yields on CCC - rated
high yield bonds are quite low on a 10 - year basis given the historically
higher default rates in this low -
quality portion of the market.
These
bonds have done little in 2015 due to the low
yields of these
high quality and often short term
bonds.
In general,
bonds are divided into two broad levels of credit
quality — investment grade (IG) and
high yield (HY).
High yield bonds are better known as junk
bonds because the credit
quality of the underlying
bond issuer is low.
The S&P 500
High Yield Corporate
Bond Index tracks the junk
bonds of issuers of the S&P 500 and as the
yields indicate, on average, they tend to be better
quality than the
bonds in the broader index.
These
bonds are typically
high -
quality and very liquid, although
yields may not keep pace with inflation.
Compare this to perhaps a slightly
higher fee, active
high yield bond manager who only holds more liquid,
higher quality positions with an investor base perhaps not as eager to hit that sell button during periods of market turmoil.
Many
bond managers like to own RMBS for its
high credit
quality, liquidity, and attractive
yields, but the problem is this: when interest rates move, the RMBS does what you don't want to see happen.
Other investments are often touted as a substitute for
high -
quality bonds, including dividend stocks, preferred shares, real estate investment trusts (REITs) and
high -
yield bonds.
A Treasury
yield (or
high / moderate
quality corporate
bond yield) is substituted for the cost of equity capital.
Because they are more equity - like,
high yield bonds have intrinsic risk that is independent of the level of
yields in
high quality bonds, the leading example of which are Treasury
bonds.
Bond yields remained stubbornly
high; it was a great time to invest in
high quality long
bonds, particularly long zero coupon
bonds.
Even if a
bond fund manager has discretion with their maturities, I might opt for GICs over a lot of
bond funds these days because reasonably conservative,
high -
quality bonds might only be paying 3 %
yields right now.
With Treasury
yields so low, most
high quality bonds are not attractive now.
Higher Credit Quality, Lower Volatility and Comparable Yields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds provid
Higher Credit
Quality, Lower Volatility and Comparable Yields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds provi
Quality, Lower Volatility and Comparable
Yields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds provid
Yields Preferreds have significantly
higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds provid
higher credit
quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds provi
quality than
high yield bonds, have exhibited lower volatility and can offer similar
yields with potential tax advantages on income as some preferreds provid
yields with potential tax advantages on income as some preferreds provide QDI.
We can (and have) capitalized on a wide range of opportunities in the
bond market, including in
higher and lower
quality bonds, strategic and
high -
yield bonds, floating - rate securities and even total - return funds, which aren't fully invested in
bonds.
While
high quality ratings often imply lower
yields, the S&P International Corporate
Bond Index has a weighted average
yield - to - worst of 2.16 %, which is
higher than the average
yields of U.S. treasuries and comparable to the 2.26 %
yield of the S&P 500 AAA Investment Corporate
Bond Index.
The portfolio you see here would
yield a
high amount of current income from the
bonds and would also
yield long - term capital growth potential from the investment in
high quality equities.
These
high -
quality fixed income assets seek to provide
higher yields than other
bonds after taxes (and recently longer maturities have been outyielding Treasuries even before tax).
High -
yield bonds are issued by corporations with lower credit
quality ratings.
Some purchase highly rated
bonds that may pay the fund a lower interest rate but are considered less risky, while others focus on lower -
quality,
higher -
yield bonds.
Lower ‐
quality fixed income securities, known as «
high yield» or «junk»
bonds, present greater risk than
bonds of
higher quality, including an increased risk of default.
You can find many
bonds issued by
high -
quality companies that are
yielding more than 6 %.
In a perverse sense, it makes sense that someone will write a book pushing
high quality bonds when the
yields are so low.
David Rosenberg favors
high quality bonds over stocks in this environment, which is notable given the low
yields.