Sentences with phrase «risks than investment grade bonds»

High yield, lower rated bonds involve a greater degree of risk than investment grade bonds in return for higher yield potential.

Not exact matches

While credit risk might seem like a bad idea with the U.S. economy still weak and the rest of the world looking equally uncertain, high - yield bonds do offer bigger returns than government and investment - grade bonds.

High yield / non-investment-grade bonds involve greater price volatility and risk of default than investment - grade bonds.

All else equal, unless it possesses some sort of major offsetting advantage that makes the risk of non-payment low, a company with a low - interest coverage ratio will almost assuredly have bad bond ratings, increasing the cost of capital; e.g., its bonds will be classified as junk bonds rather than investment grade bonds.

Investment grade bonds are considered to be lower risk and, therefore, generally pay lower interest rates than non-investment grade bonds, though some are more highly rated than others within the category.

Investing in high yield fixed income securities, otherwise known as «junk bonds», is considered speculative and involves greater risk of loss of principal and interest than investing in investment grade fixed income securities.

Default risk Historically, the risk of default on principal, interest, or both, is greater for high yield bonds than for investment grade bonds.

Floating - rate loans» low credit ratings indicate greater potential risk of default relative to investment - grade bonds (though default rates for floating - rate loans historically have been lower than on high - yield bonds).

Income potential is higher than investment - grade bonds to offset the high level of default risk.

High Yield bonds involved greater risk of default or downgrade and are more volatile than investment grade securities, due to the speculative nature of their investments.

Bank loans however, carry sub-investment grade ratings and have significantly more credit risk than investment grade corporate bond floating - rate securities.

A: It's important to note that the Wellesley and investment - grade bond fund were recommended for investors who want to take more risk than an almost guaranteed short - term bond fund.

A: When you know you will need the money within 2 years, I don't think you should take any more risk than a short - term investment grade bond fund.

That gives it substantially more credit risk than investment - grade bond funds, but the high - yield short positions moderate some of that risk.

Investment grade corporate bonds typically offer better return potential than Treasury bonds, and investment grade debt allows investors to pursue those returns without adding as much risk as high yiInvestment grade corporate bonds typically offer better return potential than Treasury bonds, and investment grade debt allows investors to pursue those returns without adding as much risk as high yiinvestment grade debt allows investors to pursue those returns without adding as much risk as high yield bonds.

High yield bonds are more volatile than investment grade securities, and they involve a greater risk of loss (including loss of principal) from missed payments, defaults or downgrades because of their speculative nature.

High - yield bonds, also referred to as «junk bonds,» offer higher rates of return, and therefore carry a higher rate of risk, than investment grade bonds.

The DRS has had more downside risk than traditional investment - grade bonds, but with the lack of yield available in fixed income, an increasing number of investors are open to the idea of an allocation to «alternative fixed income.»

High yield bonds typically offer better return potential than Treasurys or investment grade bonds as a way of compensating investors for taking on greater risks.

Junk bonds carry higher default risk and are thus far more sensitive to the health of the economy than investment - grade bonds.

Income potential is higher than investment - grade bonds to offset the high level of default risk.

For example, the total return for the bond market has not only beaten the total return for the stock market in the period, the risk - adjusted reward for investment grade bond ownership has been far greater than the risk - adjusted nominal gains in stocks.

High - yield, non-investment-grade bonds involve higher risk than those that invest in investment - grade bonds.

High yield bonds are more volatile than investment grade securities, and they involve a greater risks of loss (including loss of principal) from missed payments, defaults or downgrades because of their speculative nature.

The Fund's investments in high - yield securities or «junk bonds» are subject to a greater risk of loss of income and principal than higher grade debt securities.

With a portfolio composed of investment - grade debt from corporate, sovereign and supranational issuers with three - year maximum maturities, the iShares 1 - 3 Year Credit Bond ETF (NYSEARCA: CSJ) aims to offer a higher distribution yield than comparable all - Treasury funds, but it does have a marginally higher credit risk.

Investments in high - yield bonds offer different rewards and risks than investing in investment - grade securities, including higher volatility, greater credit risk, and the more speculative nature of the issuer.

Wexboy is nice enough to add almost a year to the average life expectancy of the old folks in his spreadsheet, and I think the proper discount rate is probably even closer to the risk - free rate (near zero these days...) than the yield of investment grade bonds.

The holdings of emerging market bond funds typically range from relatively low risk BB + bonds (one notch lower than investment grade) to high - risk C issues.

are expressing perplexity over the market for bonds, which is institutional and driven by accounting and regulatory concerns (ALM, pension funding regs, risk charges on surplus for holding equities, marking investment grade bonds at amortized cost rather than to market, etc.).

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

Investing in high yield fixed income securities, otherwise known as «junk bonds» is considered speculative and involves greater risk of loss of principal and interest than investing in investment grade fixed income securities.

High - yield / non-investment-grade bonds involve greater price volatility and risk of default than investment - grade bonds.