High Yield Corps Continue Higher
M* Category (HY) 1 mo +1.34 3 mo+3.13 ytd +12.58
http://news.morningstar.com/fund-category-returns/high-yield-bond/$FOCA$HY.aspxiShares iBoxx $ High Yid Corp Bond (Etf) HYG 87.42 +0.05 (0.06%)
Oct 24 - Close .Hit 52 wk high earlier today
52 week 75.09 - 87.56 Div/yield 0.39/5.41%
https://www.google.com/finance?q=NYSEARCA:HYG&ei=xcgOWNH5MIepmAHR_qf4Cghttps://ycharts.com/indicators/us_high_yield_master_ii_total_return_index_valueMarket Commentary From Hotchkis & Wiley HWHIX
Period ended September 30, 2016
The BofA Merrill Lynch U.S. High Yield Index returned +5.5% in the third quarter of 2016. The index posted positive returns in all three calendar quarters of 2016, and is now up an impressive +15.3% since the beginning of the year. Commodity sectors once again led the way during the quarter; thus far in 2016 the energy sector has returned +31%, metals and mining +39%, and steel +44%. Spreads on the broad market tightened by 124 basis points in the quarter; commodity sectors tightened by about 200 basis points while non-commodity sectors tightened by about half that amount. Spreads for commodity sectors are now within 100 basis points of the overall market, a far cry from the +800 basis point gap reached earlier in the year. Default rates for commodity sectors have risen and currently stand in the low-to-mid teens. While this is a record-high, it is lower than many pundits forecasted and it appears to have plateaued, largely due to the +30% rise in oil prices this year. The default rate outside of commodity sectors is a nearly non-existent 0.5%.
OUTLOOK (Scoring Scale: 1 = Very Negative . . . . 5 = Very Positive)
Fundamentals (3): We maintained the fundamentals score at 3. Revenue growth turned slightly negative though operating income remains slightly positive, albeit rather anemic....
Valuation (2): We lowered the valuation score from 3 to 2. The yield-to-worst fell to 6.3%. Spreads narrowed from 621 basis points to 497 basis points, which is about average from a historical perspective....
Technicals (3): We maintained the technicals score at 3. The slight lull in new issuance has helped balance supply and demand ...
http://www.hwcm.com/institutional-strategies/income-strategies/high-yield-commentaryJoin us on October 27th for an informative webinar as
we provide a market update and share our findings
on the opportunities and risks in the small and mid
cap high yield market. The webinar will feature Mark
Hudoff, a 29-year industry veteran and Portfolio
Manager of the Hotchkis & Wiley High Yield Strategy.
http://www.hwcm.com/assets/documents/Marketing-Pieces/HY-Conf-Call/HW-High-Yield-Oct2016-Save-the-Date.pdfMoney Managers comment on Long Dated Bonds
The Most Crowded Trade in Bonds Could Be Crumbling Brian Chappatta
Anchalee Worrachate
Bloomberg Updated on October 24, 2016 — 9:52 AM CDT
“Rates are rising from a very, very low base, which means there’s lots of downside and very little upside” for bond prices, said
Kathleen Gaffney, a Boston-based money manager at Eaton Vance Corp., which oversees $343 billion. She runs this year’s top-performing U.S. aggregate bond fund and has reduced duration and boosted cash. “If you don’t know how to time it, and I certainly don’t, you just want to get out of the way.”
“There were too many investors on one side of the boat,” betting that near-zero interest rates and central-bank bond-buying “were going to last as far as the eye could see,” said
Bryan Whalen, portfolio manager at Los Angeles-based TCW Group Inc., which manages $175 billion in fixed-income assets. “This recent selloff, particularly in the long end, is kind of just the beginning.”
Christoph Kind, head of asset allocation at Frankfurt Trust, which oversees $20 billion. “Central banks, after a long period of disinflation, are going to tolerate higher inflation. That is not good news for longer-dated bonds.”
Some bond bulls say they’re staying the course.
Lacy Hunt, who helps steer the $447 million Wasatch-Hoisington U.S. Treasury Fund, said he sees rates remaining this low or even lower in the year ahead. That means he’ll stay long duration. The fund, which only holds Treasuries maturing from 2042 to 2046, has topped 99 percent of peers this year and during the past three,
Steven Major, head of fixed-income research at HSBC Holdings Plc, one of the Fed’s 23 primary dealers, said a year from now yields will be lower, and he doubts they’ll be higher in five years.
... losses have “lots of room to run given the very low growth and inflation of the last two years seems to be shifting to a higher track for both,” said
Mark Nash, head of global bonds in London at Old Mutual Global Investors, which oversees the equivalent of about $435 billion. He said he began shorting duration six weeks ago.
Progressively easier monetary policy “appears to be over in at least the near term,” he said. “So, sell bonds.”
http://www.bloomberg.com/news/articles/2016-10-23/most-crowded-trade-in-bond-market-is-a-powder-keg-ready-to-blow 
