Bond Investors Should Watch Out for the Flavor of the Month

Rising rates and inflation aren’t the biggest risks high-yield bond investors face today. We think the larger concerns are concentration and crowding stemming from low liquidity.

read more

Forget Volatility; Watch Credit Quality, Maturity

If you’re worried about the recent spike in bond market volatility, we’ve got a bit of advice: Don’t be. There are plenty of other risks—chiefly credit quality and flatter yield curves—that are causing shakeups in some corners of the fixed-income world. Happily, there are things you can do about them.

read more

Multisector Plan Can Help Avoid the Crowd in Credit

Chasing returns into—and out of—specific credit sectors happens so often in bond markets that it hardly rates a raised eyebrow. But running with the herd can be risky, which is probably why Federal Reserve officials reportedly have discussed slapping exit fees on bond funds to avoid a disorderly rush to the exit.

read more

Are Bank-Loan Investors Getting What They Bargained For?

Ashish Shah (pictured) and Ivan Rudolph-Shabinsky Investors who chose high-yield bank loans over high-yield bonds earlier this year, expecting to be insulated against rising rates, might be surprised to find that bonds might have worked out better.

read more

Beware the Dangerous Stretch for Yield

The US Federal Reserve talked in early summer about tapering its quantitative easing plan and raising interest rates—in part to stop investors from chasing yield into the arms of riskier loans. In the high-yield market, however, the conversation had exactly the opposite effect.

read more

With Rates Going Up, Give Bonds Some Credit

After the bond market’s stumble last quarter, defending against rising rates has moved front and center for many investors. One approach that has been effective over time has been exposure to credit-oriented sectors and strategies.

read more

The Sand Continues to Shift in High-Yield Bank Loans

Investors continue to pour money into funds that invest in high-yield bank loans, reciting the numerous perceived advantages of this asset class. But investors’ thirst for loans is encouraging borrowers to be aggressive, and the risks seem to be rising. Here are three commonly cited benefits of high-yield bank loans, and our take on why [...]

read more

Looking Under the Hood at High-Yield Bank Loans

Ashish Shah, Gershon Distenfeld and Ivan Rudolph-Shabinsky When you’re shopping for a car, you take a look under the hood to see what makes the thing run. You also check out the car’s features: does it have heated seats, a rear-view camera, a GPS?

read more

High-Yield Bank Loans: Look Before You Leap

Ashish Shah, Gershon Distenfeld and Ivan Rudolph-Shabinsky High-yield bank loans are a hot topic again in capital markets, with features touted as ideal for today’s environment. But we think it makes sense to take a closer look at what bank loans really are—and aren’t. In our opinion, there are a few holes in the case [...]

read more

Archives by Month:

Archives by Subject: