High-Yield Bonds

To summarize the market action of March of 2025: U.S. stocks (SPX) did poorly, international stocks (especially Europe, VGK) did well in dollar terms, and gold (IAU) did spectacularly well. The main culprit appears to market concerns about the Trump administration’s tariff policies.

With nearly half of the bond market now outside of the Agg, a number of opportunities exist for those seeking exposure beyond the benchmark.

Since mid-January, a new political regime in Washington has shaken the geopolitical landscape and global markets. In this volatile environment, bonds have performed well, resuming their traditional role as ballast against falling stock prices and attracting strong demand from investors.

Investors just can’t get enough of ETFs, and issuers are more than happy to oblige. Through the middle of last week—still with a handful of days left in the quarter—208 new U.S. ETFs were launched in Q1, according to Wall Street Horizon data.

Portfolio Managers John Kerschner, Nick Childs, and Jessica Shill discuss the AAA CLO ETF landscape and highlight the most important considerations for investors.

As policy uncertainty grows, we consider how tariffs and other government actions might impact inflation, interest rates, and market sentiment.

The stock market sell-off appears to be signaling a recession. However, we believe the bond market disagrees.

Investment-grade floating-rate notes prices tend to be more stable than their fixed-rate counterparts, so they may be worth considering during periods of volatility.

One of the biggest challenges investors face today is navigating the most concentrated U.S. stock market in history, where the largest stocks represent a record share of total market value.

Ever since interest rates got up off the floor in 2022, there’s been increased interest in credit, and that’s why I’m devoting this memo to it. It’ll come a little closer than usual to “talking my book,” but I think the subject justifies that.

The value today of quality bond exposure in your high yield portfolio.

Opportunities have increased significantly in frontier markets debt as more countries have made a conscious effort to open their capital markets to international investors and currencies have become more fairly valued.

February’s market turbulence saw investors pivot toward defensive strategies as policy uncertainty intensified, driving a broad market rotation from mega-cap tech stocks to bonds, gold, and international equities.

With major US policy change unfolding, flexibility across and within asset classes will be critical.

Looming U.S. and global policy shifts may potentially rattle markets, but a tactical and flexible approach could help investors navigate risks and opportunities regardless of how events play out.

We delve into the unprecedented level of equity risk investors are taking, the record-high uncertainty measures facing further impacts from deglobalization, and the benefits of maintaining a diversified portfolio through it all.

Should you avoid lower-rated, riskier investments like high-yield corporate bonds or bank loans? Not necessarily, but you should understand the risks.

In the report, John Kerschner, Head of US Securitized Products & Portfolio Manager, and John Lloyd, Lead for the Multi-Sector Credit Strategies & Portfolio Manager, review the best-performing U.S. fixed income sectors of 2024 – what worked, what didn’t, and what it means for investors going forward.

Attractive yields and a broad opportunity set bolster active bond investments amid today’s uncertain macroeconomic and market outlook.

Long maturity treasuries can provide downside protection to offset equity risk, in our view.

Global equities ended 2024 on a strong note, driven by the continued dominance of U.S. equities, which were propelled even higher by the reelection of President Donald Trump.

Private credit has been one of the most talked-about segments in fixed income markets over the last few years.

Building a bond portfolio these days isn’t easy. Interest rates have been volatile. Credit spreads are tight. And sweeping change in US fiscal, trade, and regulatory policy is underway. We think securitized assets deserve a closer look.

At the same time, the Fed has mostly ignored the impact of easy financial conditions—the combination of stock, bond, and credit conditions—offsetting increases in interest rates by bolstering wealth and confidence.

As the sequel unfolds, particular industry sectors in affected countries are likely to be more impacted. Global Head of Credit Research Mike Talaga, Head of EMEA Credit Research James Maxwell, and Client Portfolio Manager Celia Soares discuss the implications for credit investors.

We hope you enjoy the latest newsletter from Harold Evensky.

Stocks rallied in early 2025 as market leadership shifted, with Large Cap Value outperforming growth stocks, while a major AI development from China triggered a sell-off in U.S. technology stocks, raising concerns about the future of AI leadership and high-end chip demand. For investors the implications are more significant for fixed income portfolios, while equities should continue to do well as long as the labor market holds up.

The evolving high-yield markets make the case for a global, multi-sector approach to generating income.

While planning for a CMA (Capital Market Assumptions) at the close of the year—and in the wake of an unexpected U.S. election result—it’s tempting to adopt a short-term perspective, focusing on the uncertainties and anxieties generated by President-elect Trump’s policies and their potentially disruptive impact on the economy and the market.

We explore how evolving priorities under the new U.S. administration may influence markets and investor outlooks.

For stocks, Christmas came with a 'Santa Clause' rally soon after the election. Since then, there's been a correction in US markets.

When investors have been looking to allocate funds within the U.S. fixed income markets, credit has seemingly been viewed as being perhaps too “rich,” or expensive, in relative terms.

Investors, many of whom were worried about stock valuations before the election, have much to consider heading into 2025. There seems reason for some exuberance—but a rational exuberance, based upon a plausible foundation of corporate and economic health.

In last week’s discussion with Thoughtful Money, I noted that we are becoming more “tactically bearish” as we progress into 2025. While we have remained primarily bullish in equity positioning over the last two years, several risks are now worth considering.

New policies could disrupt markets, but high starting yields and strong demand for income should provide ballast.

Use this guide to transform our 2024 Retirement Insights into action in 2025, focusing on areas of plan design, tax credits and participant engagement. Our Mike Dullaghan shares the highlights.

Although we are loath to make predictions, conditions appear to be favorable for fixed income in the coming year, and we think investors should consider adjusting their allocations accordingly.

U.S. equities closed 2024 on top and U.S. growth took back leadership from U.S. value.

Despite a lackluster 2024 for most bonds, investors with an eye on the long-term time horizon could reap future benefits.

European bond markets are climbing a mountain of worry. Despite the risks, history suggests a positive outcome.

Gain insights into 2025’s top tech trends and market opportunities, and what experienced investors should consider for smart tech investments.

Continued volatility, falling yields, and other expectations for the year ahead, plus seven strategies to take advantage.

We prefer equities over fixed income, in particular U.S. equities as the outlook for the U.S. economy is solid and promising.

Brent Olson and Thomas Ross, fixed income portfolio managers, believe that high yield bonds offer comfortable driving for now, but investors might need to negotiate more difficult terrain later in 2025.

In his 2025 investment outlook, Portfolio Manager John Lloyd shares his views on the attractiveness of a multi-sector approach to fixed income investing.

"Trump Trade 2.0" fueled U.S. equity and digital asset rallies, while real assets faltered under a strong dollar.

Portfolio managers and market strategists from Payden & Rygel review the opportunities and risks ahead for four bond market sectors: high yield, emerging markets, global bonds and low duration securities.

We expect high yield bond issuers to maintain healthy balance sheets and defaults to remain low.

To improve potential returns and mitigate risks, investors should choose from the widest range of opportunities.

An enduring image from 2024 will be the capture of the SpaceX booster rocket by the Mechazilla robot arms on its return to Earth. This achievement served as a powerful metaphor for the year: the improbable not only became possible but redefined expectations.

We examine how a potentially complex bond market in 2025 could still offer opportunities in high-yield bonds, municipal bonds, and inflation-protected securities.

Strong 2024 performance may be tough to replicate given tight credit spreads, but we still have a favorable view on corporate bond investments given the strong economy.

We believe municipal bonds currently offer a compelling balance of risk and reward for investors in higher tax brackets.

Financial markets often move in cycles where enthusiasm drives prices higher, sometimes far beyond what fundamentals justify.

Five of Franklin Templeton’s specialist investment managers provide their annual outlooks for the global economy and key asset classes, including global equities; global fixed income; global infrastructure; the macro fixed income environment; municipal bond market; high yield bond market; small cap equities; U.S. dollar; U.S. economy; and U.S. equities.

Credit spreads are critical to understanding market sentiment and predicting potential stock market downturns.

Let’s take a look at five of VettaFi's articles that significantly resonated with the community in 2024.

For most of the last fifty years, fixed income investing has been characterized by owning some combination of Municipals, Corporates, Treasuries and Agency Mortgage-Backed Securities.

For investors looking to get ahead of the greater bond market, Eaton Vance's Total Return Bond ETF can do the trick.

It is important for savers to understand guaranteed and non-guaranteed options when looking at retirement solutions offered within a 401(k) plan. Our Mike Dullaghan shares the highlights and talks about the need for personalized strategies.

For most of the last fifty years, fixed income investing has been characterized by owning some combination of Municipals, Corporates, Treasuries and Agency Mortgage-Backed Securities which has worked well with periods of secular disinflation.