- The junk-bond market may be a bit frothy at the moment, but the real risk for high-yield paper is not a quick uptick in defaults, says Fitch, but instead that interest rates in general move higher. Interest rate volatility has been dormant thus far this year, but Fitch - looking back almost exactly one year - reminds about how quickly it can return.
- As for credit: "Fitch recognizes the currently high issuance volumes and historically low yields in the leveraged finance space. However, in the view of Fitch’s Corporates team, we do not see a great deal of breakdown in credit discipline despite diminishing returns." The team also notes that while deal volume has picked up, it remains smaller than that of 2006-07 LBO boom, and the size, volume, and quality of today's transactions are "collectively less risky" than those of the previous cycle.
- ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, ANGL, HYLS, UJB, XOVR, THHY, SHYG, YPRO, QLTC, HYND, HYZD
Higher rates, not defaults biggest risk for high-yield says Fitch
From other sites
Video at CNBC.com (Oct 22, 2014)
Video at CNBC.com (Oct 21, 2014)
Video at CNBC.com (Aug 15, 2014)
at CNBC.com (Jun 25, 2013)
at CNBC.com (Jun 17, 2013)
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