Author Archives: Heather Rupp

US Financial Markets: Demographics and the Income Opportunity

We are in the midst of a global shift in demographics as the Baby Boom generation ages and faces retirement, causing a need for reduced volatility in their investments.  We believe this creates real issues for future money flows.  We …

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High Yield Bond Investing: Understanding Yield and Default Rates

We’ve always viewed default risk as one of the primary risks in high yield investing.  Unlike stocks, bonds have an end date and value via their maturity date and maturity price of par.  There may be a lot of price …

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Strategy Adjustments: Sell Discipline

As we noted last week, we have made some strategy adjustments as we work to help improve liquidity and dampen volatility.  Along those lines, we have implemented a sell discipline.  While as active managers we are always monitoring our holdings …

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Strategy Adjustments: New Issue Allocation

Investing is a dynamic process and managers must adjust to the market in which they find themselves.  We have done just that with some recent strategy adjustments.  To address the liquidity issues and concerns within the high yield market, we …

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High Yield Market Technicals

As we start to see the high yield market gain some footing, it is important to note the improved market technicals, mainly fund flows and primary market issuance. For the week ending March 16th, we saw high yield retail funds …

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“Risk” in High Yield Relative to Equities

We’ve written about this topic before but feel it is worth revising given some of the rhetoric we hear by the financial pundits today as they discuss “risky” securities. Some seem to classify high yield bonds as “risky” but don’t …

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Positive Signals

After a rough last couple months—or in actuality a rough past six months—we are starting to see some positive signs in the high yield market. After yields surpassed 10% in mid-February1, we are beginning to see investors come back into …

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A Negative 2015, but an Opportunity Ahead

The high yield bond market was down 4.6% for 2015, making this only the sixth time we have seen the market post a negative calendar year return in its nearly thirty years of existence and the third worst year on …

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Tranche Size Constraints in High Yield ETFs

There is no doubt that liquidity has moved to the forefront for investors in the high yield market.  In our commentary last week we looked at the concept of liquidity and how post-financial crisis regulations have impacted dealer inventory, but …

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Understanding Market “Liquidity”

Liquidity is generally defined as the ability to purchase or sell an asset without causing a dramatic change in price. However, this definition can be misleading as throughout the history of markets, we have seen securities trade with big price …

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