As measured by the Merrill Lynch High Yield Master II Index - a daily total return index. And today is looking like 16. It's been a slow plodding rise, but a rise nonetheless. In fact, YTD, the average open end junk bond fund has gained almost as much as for the entire year of 2014. Some of the funds less exposed to oil and gas issues have done much better. Junk's rise this week has come at the expense of the safer and mundane areas of Bondland ala Treasuires and munis.
Edit: Without checking, I believe February is shaping up to be the first month of out performance of junk corporates over junk munis since December 2013. And on a total return basis, junk munis are looking at their first monthly decline since 2013. But of course, we are still early in the month.
Comments
What are you using to measure HY Muni Junk?
Sometimes the beginning of the month is not a good time to judge bond performance. Back in the day there were people who would 'buy the dividend' buy a bond at the end of the month, get the dividend and then sell to make some $. That can be done with ETFs.
http://finance.yahoo.com/echarts?s=NHMAX+Interactive#{"range":"ytd","scale":"linear"}
http://finance.yahoo.com/echarts?s=HYD+Interactive#{"range":"ytd","scale":"linear"}
Maybe this will put an end to the global deflation fear mongering.
I bailed from junk way too early. But don't dislike them and you've done well. When I think of bonds, it's usually in the context of interest rate sensitive varieties (like govt. backed). As you know, junk reacts more to the health of the economy than it does to interest rates. The lower the tier of junk, the more this is true.
Interested in Lockhert's speech today. Got a bit overweight in the oil sensitive equities as it was bottoming. (poor record-keeping on my part). So, using this week to lighten up a bit. Maybe another good day to off-load a little more. Still like the NR sensitive stuff going foreward. Just a matter of keeping the exposure reasonable for age, situation, etc.
Thanks for all your contributions Junkster - which I always enjoy reading.
---
Edit: Fed Gov. Lockhart threw cold water on the markets in today's speech in Naples, Fla as I rather expected. Sees possible rate increase in June. Ha. Not to be taken too seriously, but did turn around the markets in the PM. Gold in particular doesn't appear to like the prospect of higher rates. Having rough day.
I think you are correct.
Pros: Jan. jobs report not enough for Fed rates hike
hmmm....
1.35% gain every 15 tradings days...
that is pretty good.
at 252 trading days per year, that's eye-watering!
me?
today i watched one long-term holding go up 3% and two others down 3%.
a different world.
c
"No matter which vehicle investors choose for high-yield exposure, it's crucial that they have a long holding period in mind, similar to what they might use for equity exposure, because of the volatility inherent in high-yield bonds. Morningstar's Bush says, "To use high yield well, investors need to hold through periods of volatility, or even buy into them, which could be the argument for certain parts of the market today. There isn't good evidence from fund flows that they've used these funds particularly well in the past."
news.morningstar.com/articlenet/article.aspx?id=682752
Edit: I should add that regarding volatility that is when this asset class is in a downtrend. Another allure of the open end is their one day lag effect. But that is a topic for another time.