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Matt's Market Insights

 

The search for yield in one chart. Below we see the Barclays High Yield Bond ETF. By "high yield," what they mean is junk. We're looking at an index of junk bonds, hence the symbol JNK. It's amazing to see how the price of this ETF has increased in such a linear fashion. Investors have an insatiable appetite for yield and they're willing to take on larger risks and lower yields to satisfy the urge. The trend seen in this chart mimics what we're seeing elsewhere across the debt markets. We're used to hearing complaints about too much debt in the world, but oddly enough, the price of debt is showing us that demand for debt is outstripping the available supply. Hence rising prices and ultra-low global yields.

 

 

 

The stretch for yield has caused pain for emerging markets, as money flows into and out of their economies. There's also the possibility that ... Log in or subscribe to continue reading.


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