By Greg Zappin | March 2, 2017
The high yield market continues to be a strong relative and absolute performer, up about 2.5% year-to-date (YTD) following a greater than 18% total return in 2016. Virtually all sectors have generated positive excess returns this year, except one: retail. The J.P. Morgan U.S. High Yield Index has tightened 28 basis points (bps), while the retail sub-index has widened 100 bps YTD. Often it pays to be a contrarian and add to sectors that are out of favor and have materially underperformed. However, the situation in retail is neither cyclical nor supply driven.
By Greg Zappin | November 26, 2015
The high yield market is tracking toward a low, single-digit negative total return for the year. This would only be the fifth time in the last 30 years that the high yield market has posted negative total returns.
By Greg Zappin | October 1, 2015
During the first half of the year, investment grade credit spreads widened due to record new issue supply, while sector-specific pain was isolated in the energy and metals space. Up until July, it seemed like if you avoided anything related to China and commodities you were safe. There has been a big change in the market recently.
By Yiwei Tang | July 30, 2015
One of the myths often heard after the 2008 financial crisis is that corporation balance sheet are stronger than ever. This week’s chart shows the ratio of net debt to EBITDA for non-financial firms has grown to a 15-year high.
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High-Yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in higher yielding, lower rated corporate bonds have a greater risk of price fluctuations and loss of principal and income than U.S. Treasury bonds and bills. Government securities offer a higher degree of safety and are guaranteed as to the timely payment of principal and interest if held to maturity.
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