Category Archives: Peritus

High Yield Default Outlook

With the energy markets once again taking a turn downward, we are seeing concern for the high yield market again escalating and talk of a spike in default rates heating up.  Yes, the energy industry does make up a large …

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The High Yield Market: An Opportunity for Active, Long-Term Investors

It has been a tumultuous couple months in the high yield market. Since the first of June, we’ve seen spreads in the high yield market widen 75bps, putting them now solidly above historical median levels.1 We are also now sitting …

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Mid-Year Update

In like a lamb, out like a lion seems to be an accurate description of the first half of 2015. As we sit in the second week of July, Greece and China have changed investor psychology (risk-off). The overall deflationary …

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Actively Navigating Energy Markets

We, like the vast majority, were surprised by the swiftness and severity of the decline in oil prices in late 2014 and into early 2015. As we re-evaluated our holdings several months ago at the oil pricing reality in the …

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No Bubble Here

We often hear the word “bubble” thrown around when people are taking about various financial markets, asset classes, and sectors. But just what does the word really mean? In looking at the various definitions of an economic or speculative “bubble” …

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History Lesson: The Performance of Various Asset Classes During Periods of Rising Rates

As a high yield manager, we have recently heard a number of people saying (we believe incorrectly) that our market is set up for doom if rates rise.  Rather, history would indicate quite the contrary.  Looking back to 1980, we …

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No Massive Rate Move on the Horizon

Markets remain laser focused on the Fed and rates, but should investors be so concerned?  Is a big increase coming?  In her press conference last week, Yellen didn’t seem to impart great confidence in the strength of the economy, consumer …

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High Yield Bonds and Interest Rates: History Does NOT Indicate Doom is on the Horizon

As investors assess their interest rate sensitivity for fixed income holdings, they often turn to the duration calculation, a measure of the sensitivity of the price of a fixed-income security to a change in interest rates. Per this hypothetical calculation, …

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High Yield in a Rising Rate Environment: Yield, Duration, Correlation, and Economic Factors

With the move we have seen in interest rates (Treasury rates) over the past month and the concerns that this move up will continue, let’s look at the high yield market and how it has traditionally responded to rate moves. …

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Strategies for Investing in a Rising Rate Environment

Accurately calling interest rate moves has proved to be a difficult task for investors over the past few years. As we entered 2014, virtually everyone (except ourselves) expected rates to rise as the long awaited “taper” began. Yet, the opposite …

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