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I couldn't find a previous MFO topic link on this (I believe linked by @Ted), but here it is from the horse's mouth (or the other end if this strategy doesn't work out):
Artisan ARTFX Nov 30 Commentary In an environment characterized most notably by extraordinarily low yields, it has been our view that the non-investment grade market offers a better risk/reward proposition than most areas of fixed income. This month exemplified the substantial interest rate risk that resides in some of the lowest-yielding parts of the market. Portfolio Composition (% of total portfolio) Corporate Bonds 75.2 Bank Loans 19.7 Equities 0.6 Cash and Equivalents 4.5 https://www.artisanpartners.com/content/dam/documents/monthly-commentary/vr/2016/nov/ARTFX-APDFX-MCommentary-1116-vR.p Henderson High Yield Opps HYOAX November 30th Corporate Bonds 87.8 % Bank Loans 6.2 % Cash 4.9 % Low Global Gov'nt Bond Yields continue to drive strong demand for HY and leveraged loans.Effort to add risk to portfolio but liquidity challenges and fewer new issues in the lower quality space has been a hindrance. https://az768132.vo.msecnd.net/documents/22438_2016_12_21_08_33_38_483.gzip.pdf As of November 30, 2016 Barings U.S. High Yield Fund BXHAXCorporate fundamentals outside of commodities have remained stable recently making high yield returns attractive relative to other income producing investments http://www.barings.com/assets/user/media/Barings-US-High-Yield-Fund-Factsheet.pdf
Related Bank loan funds back in favor Dec. 23, 2016 2:24 PM ET|By: Stephen Alpher, SeekingAlpha News Editor Bank loan funds (also known as senior loans or leveraged loans) have seen $5.6B of net inflows this year, with a nice chunk of that coming in the weeks since the election, writes Chris Dieterich at the WSJ. It's no secret why: First, investors view bank loans as lower risk than junk bonds as they're ahead in the corporate structure in the event of a default. Maybe more importantly given the current environment, these loans are floating rate, making them popular in times of rising interest rates. http://seekingalpha.com/news/3232452-bank-loan-funds-back-favor
Those allocations seem to be the standard for income now. One fund I have has 62% corporates. Bank loans are 19%. The fixed income holdings are weighted more to B and BB. The managers play an important role here in how the fund will perform, more so than usual.
Comments
Regards,
Ted
Indeed good reading.
Old_Skeet
https://researchaffiliates.com/documents/586-The-Emerging-Markets-Hat-Trick.pdf
Artisan ARTFX Nov 30 Commentary
In an environment characterized most notably by extraordinarily low yields, it has been our view that the non-investment grade market offers a better risk/reward proposition than most areas of fixed income. This month exemplified the substantial interest rate risk that resides in some of the lowest-yielding parts of the market.
Portfolio Composition (% of total portfolio)
Corporate Bonds 75.2
Bank Loans 19.7
Equities 0.6
Cash and Equivalents 4.5
https://www.artisanpartners.com/content/dam/documents/monthly-commentary/vr/2016/nov/ARTFX-APDFX-MCommentary-1116-vR.p
Henderson High Yield Opps HYOAX
November 30th
Corporate Bonds 87.8 %
Bank Loans 6.2 %
Cash 4.9 %
Low Global Gov'nt Bond Yields continue to drive strong demand for HY and leveraged loans.Effort to add risk to portfolio but liquidity challenges and fewer new issues in the lower quality space has been a hindrance.
https://az768132.vo.msecnd.net/documents/22438_2016_12_21_08_33_38_483.gzip.pdf
As of November 30, 2016 Barings U.S. High Yield Fund BXHAXCorporate fundamentals outside of commodities have remained stable recently making high yield returns attractive relative to other income producing investments http://www.barings.com/assets/user/media/Barings-US-High-Yield-Fund-Factsheet.pdf
M* High Yield Returns
http://news.morningstar.com/fund-category-returns/high-yield-bond/$FOCA$HY.aspx
Related
Bank loan funds back in favor
Dec. 23, 2016 2:24 PM ET|By: Stephen Alpher, SeekingAlpha News Editor
Bank loan funds (also known as senior loans or leveraged loans) have seen $5.6B of net inflows this year, with a nice chunk of that coming in the weeks since the election, writes Chris Dieterich at the WSJ.
It's no secret why: First, investors view bank loans as lower risk than junk bonds as they're ahead in the corporate structure in the event of a default. Maybe more importantly given the current environment, these loans are floating rate, making them popular in times of rising interest rates.
http://seekingalpha.com/news/3232452-bank-loan-funds-back-favor