Five Ways to Keep Out of the Bond Liquidity Trap

Bond investors are used to managing interest-rate risk and credit risk. But the financial crisis should have taught us that there are times when liquidity risk can be just as important to manage. Now is one of those times.

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High Yield’s September Sell-Off Doesn’t Change the Story

By Ivan Rudolph-Shabinsky (pictured) and Gershon Distenfeld of AllianceBernstein (NYSE: AB) The recent sell-off in high-yield bonds has many investors wondering whether this is another big buying opportunity—like prior sell-offs have been—or the start of something more ominous. 

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The Liquidity Illusion: Pension Funds Should Rethink Fixed Income

Pension fund managers, like many investors, have historically paid a premium for liquidity. Lately they’ve started to realize that liquidity can be an illusion—but it can also be an opportunity.

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In EM, Beware Commodity Riches Without Policy Smarts

By Fernando Losada (pictured) and Alexander Perjessy of AllianceBernstein (NYSE:AB) Fixed-income investors often divide emerging markets into commodity exporters and commodity importers. We think this overlooks an important reality: commodity wealth is not the sole—or even the most important—driver of EM performance.

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China’s Property Market: The Risks for Banks

By Hayden Briscoe (pictured) and Hua Cheng of AllianceBernstein (NYSE:AB) Despite worries about a collapse in China’s property market, we think the financial system will navigate the coming credit cycle if banks can buy time to resolve loan problems—and receive government support if needed.

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New US Bank Rules a Boon for Bond Investors

By Jeff Skoglund (pictured) and Shrut Vakil of AllianceBernstein (NYSE: AB) US banks have come a long way since the financial crisis, and that’s good news for fixed-income investors. We think better fundamentals and stricter regulations are creating a good formula for banks’ preferred securities.

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Low Duration Means Low Risk? Not Necessarily

To protect their portfolios from rising interest rates and volatility, many high-yield investors have headed for short-duration strategies. We think some of the more popular approaches may expose investors to bigger hazards than they realize.

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High-Yield Bonds: Call Waiting

High-yield bonds’ attractive income has made them popular in today’s low-rate environment. But market complacency has caused callable-bond investors to ignore a lurking risk: duration extension in a rising-rate scenario.

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Is This Bond for You? Less Liquid, Yields Great

Bond investors have historically enhanced their returns by taking on more interest-rate or credit risk. Today, a third opportunity is emerging for investors: the liquidity premium.

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Rising Rates: The Good, the Bad…No Ugly

By Doug Peebles (pictured) and Ivan Rudolph-Shabinsky of AllianceBernstein (NYSE:AB) The US Fed has said it will almost certainly boost short-term interest rates by 2015, and many bond investors are focused intently on managing the risks of rising rates. But it’s also important to recognize that there are benefits.

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