‘Junk’ Bonds are Back, Risk is On

‘Junk’ Bonds are Back, Risk is On

FLASH: Speculative-grade bond yields have retraced nearly all of Y 2018’s selloff

Speculative-grade bond yields have retraced much of 2018's selloff

This action is the latest sign that investors have returned to the market with a after fleeing for safer asset classes at the end of Y 2018.

Here is how the market has been acting since 31 December, as follows;

  • Investors have been shoveling cash into funds that buy high-yield debt, with data provider Lipper reporting an inflow of $3.86-B last week, the biggest since July 2016
  • US junk bonds have had the best start to the year since Y 2009 and have been the best asset class in fixed income with YTD returns of 4.83 %
  • The biggest gains have come in the riskiest part of the market, with triple-C rated notes returning 5.53%.
  • The markets resilience augers well for equities going forward.

Remember, always take what the market gives.

Stay tuned…

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