(In 2008, for example, the average high -
yield bond fund lost 26 %, not a whole lot more comforting the stock market's 37 % loss.)
Not exact matches
He
lost money because a lot of other
funds have made money gambling on corporate junk
bonds that are
yielding about 6.5 % now.
Also
funds and ETFs that hold corporate
bonds and hedge by selling treasury
bond futures may
lose value if the spread between corporate
bond yields and treasury
bond yields widens.
The BMO Floating Rate Income
Fund, for example,
lost more than 48 % in 2008 as high -
yield bonds cratered along with stocks and real estate.
Here's the break - out, by
fund inception date: Some observations: - Every
fund listed (5 years or older) with current
yields of 6 % or more,
lost more than 20 % of its value in 2008, except three: PIMCO Income A PONAX, which
lost only 6.0 %; TCW Total Return
Bond I TGLMX, which
lost only 6.2 % (in 1994); and First Eagle High
Yield I FEHIX, which
lost 15.8 %.
As interest rates go up, your
bonds will
lose value while your
yield will not change (in a
bond fund, your
yield will rise slowly as the
fund sells older
bonds and buys new ones, but then you will realize capital losses along the way).
High
yield corporate bonds tracked in the S&P U.S. Issued High Yield Bond Index have returned just under 5 % year to date but lost ground the past several days as fund outflows weigh on the market driving prices down and the weighted average yield (yield to worst) up by 22bps since last week to end at 4.
yield corporate
bonds tracked in the S&P U.S. Issued High
Yield Bond Index have returned just under 5 % year to date but lost ground the past several days as fund outflows weigh on the market driving prices down and the weighted average yield (yield to worst) up by 22bps since last week to end at 4.
Yield Bond Index have returned just under 5 % year to date but
lost ground the past several days as
fund outflows weigh on the market driving prices down and the weighted average
yield (yield to worst) up by 22bps since last week to end at 4.
yield (
yield to worst) up by 22bps since last week to end at 4.
yield to worst) up by 22bps since last week to end at 4.88 %.
In the 2008 financial crisis, for instance, some high -
yield and strategic
bond funds lost 30 % or more, while higher - quality
bonds, like short - term U.S. Treasury
bonds, had gains.
There are a lot of desperate pension plans looking to make up for
lost time, and hoping against hope, buying dividend paying and growth stocks, high -
yield bonds, alternatives like hedge
funds, private equity, etc., at the wrong time.
Yields will rise, and you will
lose money as
bond prices start to fall (unless you hold until maturity, but that is a different discussion of buying
bonds versus
bond funds).