Breaking Down Borders in High Yield

After a multiyear rally, many high-yield investors are looking for new strategies to better balance risk and return. We don’t think a deep dive into riskier credits is the answer. Instead, investors should consider moving beyond traditional boundaries—both geographic and in credit rating.

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Challenges in Today’s Municipal Market

Most fixed-income investments carry two key risks: interest-rate risk and credit risk. Both affect a bond’s value in the market. But before the 2008 financial crisis, interest-rate risk was the primary concern of many investors and investment managers—credit risk was much less of a consideration. My colleague Michael Brooks explains why.

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Euro-Area Governments Should Heed S&P’s Warnings

Market reaction to S&P’s decision to downgrade several euro-area countries last week has been rather muted, probably because the move was not really a surprise. Still, I think euro-area governments should pay close attention to the rating agency’s reasoning.

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Do Sovereign Downgrades Matter?

Speculation continues to build that another major credit rating agency will downgrade the US this year. What impact, if any, would further sovereign downgrades have on the capital markets?

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