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.

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Gauging the Mortgage Trade Today

Doug Peebles and Matthew D. Bass Is the mortgage trade over? No, and in some ways, it’s just beginning.

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High-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.

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High-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.

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Looking 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?

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High-Yield Bank Loans: Look Before You Leap

Ashish Shah, Gershon Distenfeld and Ivan Rudolph-Shabinsky High-yield bank loans are a hot topic again in capital markets, with features touted as ideal for today’s environment. But we think it makes sense to take a closer look at what bank loans really are—and aren’t. In our opinion, there are a few holes in the case [...]

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Do TIPS Pose a Hidden Risk to Seekers of Inflation Protection?

Treasury-inflation protected securities, or TIPS, have been a popular choice for investors concerned about future inflation. And TIPS’ returns have been impressive in recent years. But the main contributor to TIPS’ performance isn’t inflation. It’s an ingredient that could become as hurtful down the road as it’s been helpful in the past.

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Global Bonds: Protection in Down Markets

As US Treasury yields continue to plumb record lows, some have quipped that government bonds have gone from offering risk-free returns to “return-free risk.” Indeed, when interest rates inevitably rise from their current levels, bondholders face the prospect of poor or even negative returns.

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Is Your Global Bond Fund Riskier than You Thought?

Global bond funds continue to attract strong inflows as near-zero interest rates lead many investors to look abroad for assets with attractive yields. As we’ve argued before, global bonds provide many important benefits, but it’s crucial that investors select the right type of fund.

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LDI: More on Going Global in Bonds

For liability-driven investors, exposure to global bonds offers important benefits: a strong correlation to domestic debt, with greatly reduced volatility. However, these are not the only positives. Today, we’ll look at some other important benefits—such as greatly expanding the investable universe and offering a natural hedge against the tail risk of a domestic credit crisis—and [...]

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