Because of the country's zero - interest rate policy, traders borrowed yen on the cheap and purchased higher
yielding assets in other countries and markets, pocketing the difference.
Borrow in one country with low interest rates and use this fund to purchase higher -
yielding assets in another country that has high interest rates.
A potential surprise: A rally in risk assets prompted by investors shifting out of cash and low -
yielding assets in search of higher returns.
Commercial property deals in Canada reached a record for a second consecutive year and show no signs of slowing as investors continue seeking high -
yield assets in a haven from global turmoil, according to CBRE Group Inc..
Not exact matches
«If U.S. rates move too quickly, they will dislocate [high
yielding]
assets more broadly and the most liquid emerging markets will not be immune to a selloff,» he added, pointing to the 2013 taper tantrum as an illustration of this idea
in action.
Yields on the securities have climbed to their highest levels
in six years, and total returns were negative 2.6 percent for the first two months of 2018, making for the worst start of a year for the
asset class since 1981.
And recessions are often presaged by certain signals: rising jobless claims; falling home sales; an inverted
yield curve; wage pressures that impact corporate margins; exogenous shocks, including oil spikes; or destabilizing valuations
in key
asset classes.
He has implemented a massive stimulus policy by cutting the central bank's benchmark interest rate to negative, keeping the 10 - year Japanese government bond
yield near 0 percent
in an effort to control the
yield curve and stepping up the Bank of Japan's
asset purchases.
«Higher U.S.
yields have contributed to the rise
in the dollar,» said Chuck Tomes, senior investment analyst at Manulife
Asset Management
in Boston.
Meanwhile government bond
yields, a reliable barometer of market fear, are falling to record low levels as investors engage
in a panicked hunt for risk - free
assets.
«Shorter duration hedge fund
assets have grown at a rapid pace even as market liquidity has deteriorated, particularly
in the high
yield and distressed debt markets.
TIAA - CREF, which has $ 542 billion under management, began investing
in cropland
in 2007 as part of an effort to diversify and, well, grow its
assets and achieve good
yields.
With rates at near zero
in the United States, and negative
in Japan and Europe, the differential is a powerful lure for carry trades,
in which investors borrow at ultra-low rates
in currencies such as yen or sterling and buy high -
yielding assets such as the kiwi.
What's more, the iShares iBoxx High
Yield Corporate Bond ETF (HYG) was No. 10 among all ETFs
in August
in asset gathering, according to ETF.com.
In an era of low interest rates,
yield traps play into the hands of financial cheats who can cook the books by inventing revenue, altering expenses and creating
assets.
Technology riches
yield bumper crops
in venture capital with new firms and new largesses - the rewards of LPs rediscovering our
asset class.
Treasury
yields have been rising not because of rising risks but because the
asset bubble
in bonds is deflating, inflation is rising, and investors are demanding more
yield.
The two largest funds
in the segment — the $ 15 billion iShares iBoxx $ High
Yield Corporate Bond ETF (HYG) and the $ 9 billion SPDR Bloomberg Barclays High
Yield Bond ETF (JNK)-- have faced sizable
asset outflows as investors fret over high valuations and rising interest rates.
The selling has extended into other
asset classes, notably commodities and high
yield, and has been accompanied by an abrupt spike
in market volatility.
It will also invest
in emerging market
assets that have a compelling case for consistent and high
yielding passive income streams.
Bond
yields spiked, and prices for a number of other financial
assets that had benefited from expectations of ongoing
asset purchases by the Fed dropped precipitously, not just
in the United States but
in almost every other country.
Elsewhere, at the single country and
asset class fund levels, High
Yield Bond Funds recorded their ninth consecutive outflow while Inflation Protected Bond Funds took
in fresh money for the 10th time
in the 11 weeks, year - to - date.
Volatility's impact on a money fund's net
asset value (NAV) from an increase
in yield falls well short of what would be necessary to challenge the stability of principal.
But
in order to keep inflation from steadily gnawing away at your money, it's important to invest it
in assets that can be reasonably be expected to
yield at a greater rate than inflation.
Easy monetary conditions should keep
yields compressed
in the near term and support risk
assets, including European credit and equities.
The era of cheap or zero - interest money that led to a wall of liquidity chasing high
yields and
assets — equities, bonds, currencies, and commodities —
in emerging markets is drawing to a close.
Instead of
yield at any price, investors wanted companies and
assets that would do better
in an environment of stable or rising growth.
Should the Fed be more hawkish and raise rates
in the next couple of meetings, both gold and the miners will likely underperform as investors position towards higher
yielding assets.
Moderator Sumit Desai of Morningstar began the panel discussion Tuesday by framing high -
yield bond growth and volatility, both
in performance and
assets.
The Carlyle Group («Carlyle») is one of the world's largest global alternative
asset management firms that originates, structures and acts as lead equity investor
in management - led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, growth capital financings, real estate opportunities, bank loans, high -
yield debt, distressed
assets, mezzanine debt and other investment opportunities.
The fund invests primarily
in investment grade debt securities, but may invest up to 10 % of its total
assets in high
yield securities rated B or higher by Moody's.
With market volatility hitting multi-decade lows, junk bond
yields also at record lows, the median price / revenue ratio of S&P 500 constituents at a record high well - beyond 2000 levels, and the most strenuously overvalued, overbought, overbullish syndromes we define, I'm increasingly concerned about the potential for an abrupt «air pocket»
in the prices of risky
assets that could attend even a modest upward shift
in risk premiums.
GDX has around $ 6 billion
in assets under management and a very weak
yield of 0.60 %, driven partly by the extremely frail balance sheets of the constituents of its underlying index.
High -
yield bonds are
in the eighth year of an investment cycle that has seen
assets under management grow threefold, to $ 300 billion, so interest among investors remains high.
Efficient pricing
in fixed - interest markets depends, to a large extent, on the existence of a well - defined
yield curve for an
asset of undoubted credit worthiness.
In this environment, generating ample income will require more than a single
asset type as well as a careful balance of
yield and risk.
«With the Italian 10 - year bond
yielding less than its US counterpart, with clear signs of accelerating growth and inflation
in Europe, and a depressed Euro adding fuel to the fire,
assets correlated to European rates will be vulnerable
in 2017,» says Mitchell.
He completed high
yield credit internships at Marret
Asset Management
in Toronto and at Connor, Clark & Lunn
in Vancouver before joining the firm.
Korean leaders to meet at North - South border on Friday: BBC Chinese geologists say N. Korea's main nuclear test site has likely collapsed: WaPo China air force intimidates Taiwan with military flights around island: Reuters Conservative Supreme Court justices appear to back Trump's travel ban: The Hill French president expects Trump will withdraw from Iranian nuclear deal: BBC Rising interest rates keep Wall Street on edge: CBS Investors will focus on various inflation numbers
in days ahead: Bloomberg A closer look at the 10 - year Treasury
yield's rise to 3 %: Calafia Beach Pundit T. Rowe Price's
assets under mgt top $ 1 trillion — a sign of active mgt growth: P&I World trade volume slumped 0.4 %
in Feb, first monthly loss since Oct: CPB
lets say jgbs
yield -1 % and the boj pays the banks plus 5 %, if this policy is credible
in anyway it will only be so to the extent that banks are willing to hold an unlimited quantity of this
asset as a store of value.
«If rates go up — and I don't think they will — then the increase
in yields would hurt metals and mining company prices as money left these
assets and moved into fixed income.»
«Perhaps the biggest issue we have with high
yield is that the
asset class» performance has been driven over the last several years not by fundamental strength, but by QE and a lack of global
yield,» BofAML credit strategist Michael Contopoulos and others said
in a note to clients.
Persistently low official inflation rates
in recent years depressed bond
yields along with risk premiums on all financial
assets.
Franklin Limited Duration Income (FTF) is a closed end fund that seeks high current income and capital appreciation through investment
in high
yield corporate bonds, floating rate bank loans and mortgage and other
asset backed securities.
Again, the result might be at most a small rise
in yields on riskless
assets matched by an equivalent tightening of credit spreads.
Technology riches
yield bumper crops
in venture capital with new firms and new largesses — the rewards of LPs rediscovering our
asset class.
This very low market volatility can lead investors to take on more risk, and
in a period of still relatively low interest rates, to «reach for
yield» — that is, buy riskier
assets than one would otherwise,
in order to achieve a desired profit or savings goal.
A long period of low rates has encouraged investors to assume greater risk
in the stretch for
yield, inflating
asset prices.
A fair amoiunt of the increase
in offshore USD denominated
assets, might very well be MNC's profits not re-shored, and off course HNW seeking
yield, deferring taxation.
For the most part, investors cite the market's four - year climb off its 2009 lows and the Dow's record closing to the Federal Reserve's aggressive and unprecedented monetary stimulus measures, which have helped push equities higher by driving down
yields in safe - haven
assets.