Seeking Alpha

Gundlach cuts DoubleLline's high-yield holdings to just 3%

  • "There's no way for prices to go up at this point," says Jeff Gundlach of the junk bond market. The average junk bond yields just 5.3% and trades above 104 cents on the dollar, he says, higher than the 103 level at which many bonds can be called by their issuers.
  • “If a bond is priced to call, and rates rise, it might not get called. People may think they own a short-term portfolio but if interest rates rise it might turn into a 10-year bond instead. It would also roll up the yield curve ... This could be a debacle."
  • I’m not worried as much about interest rate risk and credit risk ... I’m worried more about liquidity risk and naively owned positions."
  • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, BSJG, HYHG, BSJI, ANGL, BSJH, HYLS, XOVR, THHY, UJB, QLTC, SHYG, BSJK, HYZD, BSJJ, HYND
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Comments (1)
  • The_Hammer
    , contributor
    Comments (4507) | Send Message
     
    what happens when it is interest rates and credit risk?
    12 Mar 2014, 10:03 AM Reply Like
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