Compared with risk assets such as stocks, U.S. high yield bonds (HYG, JNK) have been weak for a period of time. The following shows how they are compared with stocks and other asset classes:
Major Asset Classes Trend
04/04/2012
| Description | Symbol | 1 Week | 4 Weeks | 13 Weeks | 26 Weeks | 52 Weeks | Trend Score |
|---|---|---|---|---|---|---|---|
| US Equity REITs | VNQ | 0.08% | 3.67% | 10.72% | 28.84% | 11.8% | 11.02% |
| Frontier Market Stks | FRN | 1.18% | 2.78% | 15.63% | 26.33% | -1.73% | 8.84% |
| US Stocks | VTI | -0.53% | 3.4% | 10.55% | 24.24% | 5.64% | 8.66% |
| Emerging Mkt Bonds | PCY | 0.14% | -0.06% | 4.16% | 9.82% | 11.37% | 5.09% |
| US High Yield Bonds | JNK | -0.25% | 0.34% | 3.14% | 15.11% | 4.84% | 4.63% |
| International REITs | RWX | -1.04% | 1.14% | 11.97% | 15.41% | -5.21% | 4.45% |
| Emerging Market Stks | VWO | -0.56% | -0.76% | 9.43% | 21.14% | -12.65% | 3.32% |
Among fixed income assets, the following table shows emerging market bonds (PCY) have been the best, with high yield bonds at the second place:
| Assets Class | Symbols | 04/04 Trend Score | 03/28 Trend Score | Direction |
|---|---|---|---|---|
| Emerging Mkt Bonds | PCY | 5.09% | 4.9% | ^ |
| High Yield | JNK | 4.63% | 4.16% | ^ |
| California Muni | CMF | 4.63% | 4.46% | ^ |
| New York Muni | NYF | 3.35% | 3.23% | ^ |
| National Muni | MUB | 3.15% | 4.08% | v |
| International Inflation Protected | WIP | 3.1% | 3.38% | v |
| Long Term Credit | LQD | 2.94% | 3.66% | v |
| Inflation Protected | TIP | 2.69% | 3.21% | v |
| 20+ Year Treasury | TLT | 2.63% | 3.6% | v |
| Intermediate Term Credit | CIU | 2.48% | 2.46% | ^ |
| Intermediate Treasury | IEF | 2.18% | 2.29% | v |
| 10-20Year Treasury | TLH | 2.1% | 2.67% | v |
| US Total Bond | BND | 1.51% | 1.64% | v |
| MBS Bond | MBB | 1.37% | 1.53% | v |
| Short Term Credit | CSJ | 0.89% | 1.07% | v |
| International Treasury | BWX | 0.7% | 1.29% | v |
| Short Term Treasury | SHY | 0.23% | 0.23% | v |
| Treasury Bills | SHV | -0.02% | 0.01% | v |
(Click to enlarge)
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
A recent zerohedge report shows the following charts:
High yield bond issuers (companies)'s gross margins have been shrinking:
(Click to enlarge)
while companies have flooded the high yield market to take advantage of the lax and low rate environment:
(Click to enlarge)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
