Want Safer Yield? Cycle to Europe

Gershon Distenfeld (pictured) and Jørgen Kjærsgaard For high-yield investors with large US credit exposures, these are uncertain times. The pricing of securities is becoming more volatile, spurred by interest-rate volatility, and companies are borrowing more, causing concern about their future creditworthiness. The solution, in our view, is to diversify—and we regard the European high-yield markets as attractive.

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Euro High Yield: Defaults Are Not the Biggest Concern

High-yield default rates have been unusually low over the past couple of years and now look as though they are on the cusp of a reversal. But default rates in themselves could be less damaging to high-yield bond returns than rising government bond yields.

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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 [...]

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Is CCC Credit Worth the Risk?

Typically, one would expect higher-risk assets to generate higher returns. But when it comes to high-yield corporate bonds, indiscriminate exposure to the CCC-and-below category may not produce the expected results. 

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