FYI: The high-yield bond market is having a good year—too good, perhaps, in the view of some analysts and investors.
Junk bonds, or debt issued by below-investment-grade companies, returned 2.5% this year, through the end of September, compared with a loss of 2.2% for investment-grade paper. But those gains reflect a sharp decline in the extra yield meant to compensate investors for the additional risk that they won’t be repaid in full. Indeed, the junk-bond market’s credit spread, or yield premium over Treasuries, recently narrowed, reaching its lowest level since before the 2008-09 financial crisis.
Regards,
Ted
https://www.barrons.com/articles/yes-junk-bonds-are-pricey-but-a-bear-market-isnt-near-1538779378
