Tag Archives: high-yield corporate bonds
Leveraged Loans Over High-Yield Bonds
As of July 5, 2018, the S&P/LSTA U.S. Leveraged Loan 100 Index returned 2% YTD, compared with the S&P U.S. High Yield Corporate Bond Index’s return of -0.29%. In 2018, U.S. high-yield performance has experienced two rather sizeable negative returns—back-to-back declines in February (-1.05%) and March (-0.45%)—followed by a turnaround in April (see Exhibit 1)….
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Tail Hedging a High Yield Bond Portfolio With VIX® Futures
In one of my previous blog posts, we demonstrated that high yield bonds exhibited a strong negative correlation with VIX and an even stronger one with VIX futures, which comes mostly from down markets. This prompted us to think that VIX futures may hold tail-risk hedging opportunities for high yield bond portfolios. In this blog,…
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Floating Securities in Advance of Rising Rates
This Wednesday, the Fed announced that they would begin raising rates, a decision that has left many investors with questions about how they will fare in this changing environment. Knowing that conventional, fixed-rate securities sometimes lose value when interest rates increase has some investors looking to floating-rate securities instead. Floating-rate securities are designed to mitigate…
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