High-Yield Bonds

I almost exclusively talk about stocks here in Dividend Digest because dividends are at the root of my strategy. But most income investing includes some level of exposure to debt.

Relatively high yields mean investors who have been focusing on short-term securities wouldn't need to sacrifice much yield if they chose MBS to help limit their reinvestment risk.

Investors could be shifting to safer debt, which could outperform once the Federal Reserve starts cutting interest rates.

Portfolio Manager Daniel Siluk believes subsiding inflation and declining interest rates underpin a compelling argument for investors to reallocate funds away from money market strategies toward shorter-dated bonds.

Elections have been anything but easy for investors. What has been easy is financial conditions in the US relative to the level of policy rates, fostering the debate over the degree of policy restrictiveness as global monetary easing begins.

Softening inflation supports the potential for a Federal Reserve interest rate cut in coming months, but there are complexities below the surface.

Explore the complexities of the high-yield market through comprehensive insights from our experts.

Last week we had our quarterly live call for Yield Shark subscribers. We had some great conversations over the course of the hour. One of the major topics that came up was what will happen through the end of the year. Will we see a correction or a rotation? If so, when will this happen? And most important, how can we prepare?

Don’t miss out. Prepare to take advantage of opportunities in the second half.

Rick Rieder and team argue that the economy is making further progress towards normalization and continues to offer a once-in-a-generation investing opportunity, which isn’t adequately represented by the benchmarks.

The Asian high-yield market is evolving faster than investor perceptions.

Today emerging markets are too big to ignore. The asset class represents a large and growing proportion of the world economy, accounting for over 40% of global GDP in 2022. The asset class includes a broad spectrum of issuers, with investment opportunities of varying risk/return.

Some experts believe investment-grade corporate bonds remain an opportunity-rich corner of the fixed income market.

In his mid-year outlook, Jim Cielinski, Global Head of Fixed Income, recognizes markets were impatient in wanting rate cuts, but the offset is fresh opportunities for investors to capture attractive yields.

Investment-grade corporate bonds remain attractive given their lower risk and relatively high yields. Long-term investors who can handle volatility might consider high-yield bonds and preferred securities, but we wouldn't suggest large positions in either.

Senior loan ETFs have gained traction as elevated rate expectations spill over into the second half of the year.

High-yield credit is experiencing strong inflows and investor confidence, potentially offering attractive returns and reduced volatility compared to other risk assets.

Municipal bonds deviated from U.S. fixed income assets and posted negative performance in May.

VettaFi discusses spot ether ETFs, spot bitcoin ETFs, and the crypto ETF universe.

The investment landscape has proved remarkably resilient thus far in 2024 given several headwinds including inflation, interest rates, and the unsettled geopolitical situation. Fortunately, employment remains solid, and companies continue to deliver improved profit growth.

Looking into the second half of the year, we are optimistic that returns will be stronger, but also expect volatility to remain elevated.

Alliance Bernstein converted two short duration mutual funds, worth almost $800 million in assets under management, into ETFs on Monday.

This week, the International Air Transport Association (IATA) significantly upgraded its profitability projections for airlines in 2024. The trade group now expects net profits to reach $30.5 billion, an increase from $27.4 billion in 2023.

Historically, the level of U.S. debt has had no correlation with the performance of the stock or bond markets.

There are many historical relationships within financial markets based on sound economic theory, which accordingly repeat cycle after cycle. High yield bonds and small cap stocks typically move in line with each other, but the two have diverged since 2022.

While the money and bond markets continue their Fed-watch saga, there is one constant that we have been emphasizing for the fixed income landscape: a new rate regime.

When it comes to investing in consumer debt, headlines may be misleading. We see opportunity.

Since the Global Financial Crisis of 2007-09, fixed income investors have suffered the worst of both worlds. For a dozen years they endured the stingiest of yields on their fixed income holdings.

Franklin Templeton Fixed Income CIO Sonal Desai discusses why rising investment and persistently loose US fiscal policy are simultaneously pushing in the direction of higher long-term real interest rates.

Interest in active fixed income products has swelled in 2024, as credit spreads narrow and the Federal Reserve holds fast to a “will they, won’t they” game.

Private capital is increasingly being used to finance consumer spending.

Recent challenges from higher rates and banking turmoil are well known to investors in preferred securities, but the performance of this asset class relative to other alternatives in fixed income may not be. Here’s why we think preferreds continue to offer attractive total return potential and a tax-advantaged income stream.

Despite the US Federal Reserve’s cautious stance on interest rates and the shifting dynamics of the equity and fixed income markets, Franklin Income Investors CIO Ed Perks believes conditions are favorable for investing in these asset classes.

We explore how stabilization and growth of global markets may potentially shift preferences toward equities relative to bonds.

With the potential for higher-for-longer yields across countries, we see the global fixed income opportunity set as the most attractive in years.

Stocks, bonds, currencies and commodities have made significant moves in the past few months. Find out what factors to consider when deploying or redeploying capital from Franklin Templeton Institute’s Stephen Dover.

We think the intersection of hope and fear offers opportunity across asset classes and market segments. Tapping into it, however, requires in-depth research and a discerning eye. Waiting for a clarion bell to ring before deploying capital might leave investors a step behind.

Shifting dynamics among global economies and markets present a range of opportunities for multi-asset portfolios.

Franklin Templeton Fixed Income CIO Sonal Desai discusses why persistently loose fiscal policy, relentless price pressures and resilient economic growth may cause a problem for the US Federal Reserve—and explains the implications for bond yields.

Although there were no huge surprises coming out of the recent Fed meeting, it may have provided hints on what the FOMC is thinking about future monetary policy changes. Franklin Templeton Institute analyzes the Fed’s statement and press conference.

The Federal Reserve just wrapped up another policy meeting, and markets continue to push back their expectations of a first rate cut.

John Hancock Investment Management has added a new ETF to the company's growing lineup. JHHY primarily invests in high yield bonds.

With yields at current levels, bond funds can lock in longer term yields, offer price appreciation potential and overall serve as a hedge against a possible hard landing. Though elevated cash balances worked during the Fed’s hiking cycle, we believe now is an opportunity for clients to consider adding duration given the potential for a Fed pause.

It makes sense that longer-maturity bonds typically provide higher yields than shorter-term bonds. After all, more bad things can happen in a longer period than a shorter one, and visibility is poorer for the next 10 years than for tomorrow. Investors expect to be paid for these risks.

Emerging-market (EM) corporate bonds are too-often overlooked by investors who presume the asset class is too niche or too risky. But the aggregate fundamentals of EM corporates are stronger than those of their developed-market counterparts.

Elevated all-in yields in high yield credit present an attractive opportunity for income-seeking investors to lock in higher levels of income. Of course, that comes with a much higher degree of risk as compared to sitting in cash.

While high-yield implies higher risk when it comes to bonds, HYD, which turned 15 years old in February, isn’t excessively risky.

Why should anyone be allocating to investment-grade corporate bonds right now?

We believe high-yield munis carry additional risks, but are worth consideration by investors in higher tax brackets who are comfortable taking added risks.

Reviewing the basics can keep you from being caught off guard if your investment is returned to you before the stated maturity date.

Q2 weakness is causing traders to up their bearish bets on bond prices, but it presents an opportunity for value-seeking investors.

Advisors weigh in on how you should approach account withdrawals after retirement in order to make your assets last.

We have always maintained it is better to accept what the market has on offer than to stretch for returns. Thanks to the inverted yield curve and our flexible mandate, the current environment is making it easier than ever to be patient while we wait for fat pitches.

Improve your income potential with a tactical, unconstrained strategy that sources opportunities across geographies and asset classes. BlackRock Multi-Asset Income Fund takes a risk-first approach while seeking to deliver a consistently attractive yield.

Why the current momentum trade, despite stretched valuations, could continue.

In the first quarter of 2024, fixed income investors turned to investment-grade corporate bond ETFs.