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  • Why Junk Is Underperforming: It's Not Interest Rates

    By Jordan Wathen - June 3, 2013 | Tickers: HYG, MORT, JNK

    Of all asset classes, bonds are the most sensitive to interest rates. Investors know the term convexity, which describes how a bond trades relative to par value given rising or falling rates.

    As investors brace for the Fed's end to quantitative easing, rates are up across the board. The 10-year Treasury yields 2.16%, up from less than 1.7% at the beginning of May. Meanwhile, higher rates are more »

  • Why It's Time to Drop Junk Debt

    By Jordan Wathen - May 17, 2013 | Tickers: HYG, JNK

    Junk debt sits atop a multi-year run as investors bid down yields and drive up bond prices. Undoubtedly the result of the Fed's non-stop quantitative easing, junk bonds trade at an average that implies a premium to par and a yield less than 5%.

    Never have junk-rated companies found it so easy to raise capital. Investors yearn for some semblance for yield, as corporate debt yields dive in a more »

  • What's Happening With High Yield?

    By Nathaniel Matherson - May 16, 2013 | Tickers: HYG, PHB, JNK

    Are you one of the many investors in search of yield in this low rate environment?

    In this article, I would like to give an update on the high-yield bond market as well as introduce a few exchange traded funds which can provide easy exposure. A high-yield bond, or junk bond, is any bond with a lower credit rating than investment-grade corporate bonds, Treasury bonds and municipal bonds. Due to more »

  • 3 Reasons Investors Should Stick with Bonds

    By Robert Baillieul - May 12, 2013 | Tickers: TLT, IEF, HYG

    "Bond crash dead ahead: tick, tick ... boom!" - MarketWatch

    "Bonds worst investment of a generation" - Financial Post

    "Waiting for the bond bubble to pop" - CNN

    The headlines in the financial media are clear: bonds are on the verge of collapse! When interest rates return to their historical averages, popular funds like the iShares Barclays 7-10 Year Treasury ETF (NYSEMKT: IEF) and the iShares Barclays 20+ Year Treasury Bond ETF (NYSEMKT: TLTmore »)

  • 2 Ways to Play Changing Fed Policy

    By Jordan Wathen - April 18, 2013 | Tickers: AGNC, HYG, JNK

    The Federal Reserve is currently buying some $85 billion in Treasuries and mortgage-backed securities each month in a bid to slash long-term interest rates. That program may soon come to an end.

    Earlier this month, San Francisco Federal Reserve Bank President John Williams commented on the buying spree, noting that bond buying could be cut, and eventually halted by the end of 2013.

    In a Town Hall meeting, he delivered more »

  • Would You Climb Mount Everest Without a Guide? (Part I)

    By Justin Carley - April 12, 2013 | Tickers: CLF, VALE, HYG

    Are you tired of listening to all the billionaires who made their fortune taking enormous gambles tell you that you are too dumb to accomplish what they did? Instead, you better just buy index funds, never sell, and be thankful you still have the shirt on your back. Not so fast. You can beat the market, and it is easier than you think. You don’t have to bet the more »

  • 2 Ways to Play Changing Fed Policy

    By Jordan Wathen - April 6, 2013 | Tickers: AGNC, HYG, JNK

    The Federal Reserve is currently buying some $85 billion in Treasuries and mortgage-backed securities each month in a bid to slash long term interest rates. That program may soon come to an end.

    On Wednesday, San Francisco Federal Reserve Bank President John Williams commented on the buying spree, noting that bond buying could be cut, and eventually halted by the end of 2013.

    In a Town Hall meeting, he delivered more »

  • 2 Ways to Play Changing Fed Policy

    By Jordan Wathen - April 6, 2013 | Tickers: AGNC, HYG, JNK

    The Federal Reserve is currently buying some $85 billion in Treasuries and mortgage-backed securities each month in a bid to slash long term interest rates. That program may soon come to an end.

    Earlier this month, San Francisco Federal Reserve Bank President John Williams commented on the buying spree, noting that bond buying could be cut, and eventually halted by the end of 2013.

    In a Town Hall meeting, he more »

  • 2 Ways to Play Changing Fed Policy

    By Jordan Wathen - April 3, 2013 | Tickers: AGNC, HYG, JNK

    The Federal Reserve is currently buying some $85 billion in Treasuries and mortgage-backed securities each month in a bid to slash long term interest rates. That program may soon come to an end.

    On Wednesday, San Francisco Federal Reserve Bank President John Williams commented on the buying spree, noting that bond buying could be cut, and eventually halted by the end of 2013.

    In a Town Hall meeting, he delivered more »

  • Betting on Floating Rates

    By Federico Zaldua - March 20, 2013 | Tickers: FLOT, HYG, LQD

    A few weeks ago, in my blog FixedIncomeNow, I made a post about how I expected current record low rates of interest to increase at some point in the near future. After all, the US economy is ameliorating at a steady peace and unemployment is starting to react to this growth. When rates go up, bond prices go down unless your bonds have a floating coupon. Since 2008 bonds with more »

  • Dangers of High Yield Hunting

    By Victor Lai - March 12, 2013 | Tickers: HYG, HYD, JNK

    Fixed income investors that were accustomed to earning 5% on a portfolio of government bonds are now getting 2% for the same securities.  The steep drop has interest starved investors hunting for yield. As usual, the easiest way to increase yield has been to increase risk, and investors have taken the path of least resistance.

    Nowhere is this more prevalent than in the high yield bond market. According to Morningstar more »

  • Why Floating Rates Are All the Rage with Investors

    By Jordan Wathen - March 1, 2013 | Tickers: FLOT, HYG, BKLN, JNK, FLRN

    Bank loans are all the rage as investors look for higher yields and more certain returns. Investors have flocked to new loan funds as a way to get more fixed-income exposure at a higher yield.

    Two of the biggest plays are floating rate notes and basic, senior loans.

    Here's why investors love these funds:

    • Little rate risk – Floating rate notes and bank debt offer investors the opportunity to ignore more »
  • High-Yield Debt Continues its Move Higher

    By Daniel James - January 22, 2013 | Tickers: HYG, LQD, JNK

    In an ultra-low interest rate universe, yield-hungry fixed-income investors have been left with precious few places to put their money to work. With record low interest rates, investors are sitting on huge piles of cash that in many cases is being funneled into high-yield funds, evidenced by the huge inflows these funds have experienced over the last year. While some analysts warn that the bull-run on high-yield debt may be more »

  • Alternatives To Fixed Income

    By Federico Zaldua - January 14, 2013 | Tickers: SAN, BP, HYG, JNK

    As a Fixed Income value investor it’s not easy to find really good investments at reasonable prices anymore. You can find specific opportunities in Europe or in countries such as Argentina or Venezuela, but the truth is that life is not so easy when US high quality credits are close to the zero bound - US 10 year Government bonds offer a 1.9% yield. The US bond market became more »

  • Time to Sell Bonds?

    By Greg Czech - November 23, 2012 | Tickers: TLT, MBB, HYG, HYD

    Despite the stock market rally over the past three years, investors have pulled billions of dollars from equity mutual funds.  And where has most of that money gone?  Bond funds.  Corporate, municipal and mortgage funds have benefited from the equity fund outflow.  Most have had spectacular runs over the past three years.  But it might be time to take profits. 

    With the looming fiscal cliff, it seems bond investors are more »

  • The Financial Road to Singapore

    By Peter Pham - June 27, 2012 | Tickers: ASEA, HYG, LQD, EWS

    Looking over the financial landscape today it is obvious that we are entering a phase of capital flight from the West towards the East.  It has been my contention that there are a number of recipients of this wealth transfer but the main ones at this point in time look to be Japan and Singapore.  I’ve covered what I think it happening in Japan right now previously, but suffice more »

  • Apollo Investment on Sale, But…

    By Justin Carley - February 8, 2012 | Tickers: AINV, HYG, PNNT, JNK

    Apollo Investment Corp (NASDAQ: AINV) has been a preferred stock recommendation for me since I recommended it here in mid-December.  What was a tremendous pick a day ago is facing some stiff pressure today.  The company reported 4Q earnings that missed estimates, lowered the dividend, and replaced their CIO/COO.  The stock, well it is down 11% as of this writing.  Even factoring that in, the stock has returned 11 more »