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Despite the macroeconomic challenges, including the recent Greek elections and the crisis in Ukraine, the European high yield market has rallied thus far in 2015. In fact, the Merrill Lynch Euro High Yield Index has returned 1.4% YTD as of 9 February, with spreads tightening by 10 basis points (bps). But, we are nowhere near the spread tightening that we witnessed in June. The current spread is 393 bps, but this is still significantly wider than the spread tights six months ago. If we break the European high yield market down even further, BB-rated bonds have retraced a large part of the spread widening, but B-rated bonds are still over 100 bps wide, compared to the tights last June.
Central Bank Watch - February 13, 2015Discusses current and expected interest rate policy at the Federal Reserve, Bank of England, European Central Bank, Bank of Japan, Bank of Canada and Reserve Bank of Australia.
Fixed Income Market Bulletin - Dynamic Risk Score Update January 2015Principal Global Fixed Income lowered the Dynamic Risk Score to a 6 reflecting heightened volatility and uncertainty regarding inflation and growth, possible rate hikes, global central bank policy, and volatile oil prices.
Multi-Asset Fixed Income Strategy Holds the Key to Higher Yield and Lower VolatilityAs the investment landscape transitions from an easy beta focus to a more challenging and unpredictable quest for alpha, traditional fixed income strategies find themselves under pressure. In response to this changing investment landscape and in the face of uncertainty, we believe now is the time for investors to consider an all-weather multi-asset investment strategy.
To the Point: CoCos Pop with Opportunity in the Hands of a Research-Rich InvestorContingent convertible bonds, also known as CoCos, offer yield potential that investors are searching for. Read more for the what, why, and how of investing in CoCos.
To the Point: Stop Trying to Meet Your Income Needs with Yield - It's Time for Total ReturnSearching for yield in riskier and illiquid assets may not be the answer. Consider shifting your focus to total return.
To the Point: Help Protect Your Fixed Income Portfolio from Rising RatesConsider an absolute-return approach with volatility-controlled opportunistic credit.