We Expect High-Yield Defaults to Remain Low
High-yield bond defaults are historically low today, even for troubled companies. Despite the worries we hear in some corners about looming high-yield defaults, we think default rates will stay low for at least the next few years.
read moreUK Equities Reach Inflation Tipping Point
Jon Ruff and Patrick Rudden As UK inflation surges ahead, equity investors should be concerned. With yields on inflation-linked bonds at extreme lows, we think real assets offer a better way to combat the risk of rising prices.
read moreGauging the Mortgage Trade Today
Doug Peebles and Matthew D. Bass Is the mortgage trade over? No, and in some ways, it’s just beginning.
read moreHigh-Yield Bonds: Tackling the Tough Questions
With high-yield bonds at record high prices and interest rates so low they’re barely visible in some parts, investors have a lot of anxious questions. Our opinion: we think high-yield bonds still offer more income and fare better in rising rate environments than other bond types.
read moreEase the Burden of Managing Risk
Risk remains important for many institutional investors, but dealing with it effectively takes time and energy. How investors approach it should therefore depend on their governance capacity.
read moreHigh-Yield Won’t Bubble Over
It’s easy to spot a bubble after it bursts. Just follow the carnage—significant, and sometimes complete, losses for investors. It’s not so easy to pinpoint a bubble beforehand, but many are convinced that there’s too much air rushing into high-yield bonds today.
read moreMunicipals Escape Taxation for Now
In the end, the American Taxpayer Relief Act did not eliminate the tax exemption for municipal bonds or modify it any way. In fact, the increase in the top marginal tax rate makes muni bonds more attractive versus taxable bonds. And the Medicare surtax on investment income, enacted in 2010 but effective in 2013, makes muni bonds more [...]
read moreLooking 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 moreTAG Could Be Tagged in Fiscal-Cliff Negotiations
Doug Peebles, Jon Denfeld and Ed Dombrowski Caught up in the wrangling over the US fiscal cliff is a little-publicized program that could have big implications for short-term investors and bond yields if the program expires on December 31. If the Transaction Account Guarantee (TAG) program ends, huge sums of money may start looking for a new [...]
read moreA Municipal Bond Cliffhanger
Municipal bonds are popular because the interest they pay is exempt from federal taxation. But in its search for solutions to the fiscal cliff, the US federal government is looking under every rock for more revenue sources. This could put muni bonds’ tax-exempt status at risk.
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