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.

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What to Think About in a Bond-Market Reboot

US interest rates are likely to head up gradually over the next several years, now that the long tailwind from a three-decade-long rate decline has subsided. With bonds still an important part of many portfolios, what should investors be thinking about?

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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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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.

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Muni Investors Should Watch Both Ends of the Curve

In early 2013, we urged investors to take a hard look at the interest-rate risk in their bond portfolios. If they didn’t do it then, they have a chance to do it now.

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Keep an Eye on LBOs, but Don’t Fret Just Yet

This year’s leveraged buyouts (LBOs) are being financed with more debt and include fewer protections for creditors. Regulators, the press and market participants are watching this closely, and so are we. But we don’t think it’s worth losing sleep over—at least not yet.

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Don’t Skip the Homework: High Yield’s Overlooked Risks

Posted by Gershon Distenfeld (pictured) and Ivan Rudolph-Shabinsky of AllianceBernstein (NYSE: AB) Many investors have taken on more risk in their quest for higher returns—especially as signs have pointed to interest rates staying stable until next year. But two key elements are often overlooked: default risk and underwriting standards.

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Bank Loans: Is the Yield Worth the Chase?

Investors who rush into high-yield bank loans seeking competitive returns might find the yield they chase is hardly worth the pursuit. Loan yields—currently quoted at about 5%—seem attractive at first blush, but we think there’s a lot less here than meets the eye.

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Energy Future Holdings Default Highlights Risks of Leveraged Loans

The Texas-sized bankruptcy of Energy Future Holdings, formerly known as TXU, may have been one of the more anticipated defaults of the past few years, but investors can still learn a lesson or two from it.

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