Fixed Income: Warning Signs for High Yield Bonds
High yield bonds, or what are better known as junk bonds, have dominated the front pages of the financial press in recent months. After enjoying a great run in recent years, yields have been pushed to record lows. As we get closer to higher interest rates, further gains will be harder to come by, and following the ‘Dodd-Frank’ regulation changes, investment banks will hold less corporate bond inventory thereby reducing the liquidity of the asset class.
BY Robert Stokes