Looking at the potential significance of an 8% yield threshold for investors in high yield bonds.
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With US Treasury yields at 5%, we explore whether ‘crowding out’ is a phenomenon evident in fixed income.
International equities may be poised for a sustained re-rating as corporate reforms, rising ROE and improving shareholder returns narrow the gap with US markets.
US valuations reflect higher ROE, but structural reforms could help discounted international markets close the gap.
With credit spreads at historic tights and rates moving higher, investors should focus on resilient yield, as there is limited room for price appreciation.
Investors concerned about high concentration in US stocks should look elsewhere to achieve better portfolio diversification.
Investors with a narrower focus are missing out on the benefits of diversification.
Why bond investors need a new playbook to maximize a fixed income allocation’s potential.