High-Yield
According to BCA Research’s US Investment Strategy service, nonfinancial corporate businesses have been more insulated from rising interest rates than they typically are during major rate-hike campaigns, but the buffer is shrinking.. Households have been…
Our Portfolio Allocation Summary for September 2023.
BCA Research's US Bond Strategy service recommends a cautious allocation to high-yield munis, but the team still prefers the sector over high-yield corporate bonds. Along with junk-rated corporate bonds, high-yield munis have been one of the top performing…
BCA Research’s US Bond Strategy service cautions against turning bullish on corporate bonds. Corporate bonds have delivered strong excess returns versus duration-matched Treasuries during the past two months. Yet the team’s fair value models, based on…
Our Portfolio Allocation Summary for August 2023.
This week we present our Portfolio Allocation Summary for July 2023.
We build a four-stage business cycle framework based on economic growth and capacity utilization, and then analyze historical returns for most major asset allocation decisions for each stage. Given that we are in the early recession stage (negative growth coupled and an overheated economy), our framework recommends a defensive positioning across all asset classes.
US high-yield corporate bonds have been rallying of late. The average index option-adjusted spread narrowed by 58 bps over the past three weeks. This improvement is consistent with the recent performance of other risky assets: the S&P 500 is up 4.2% since…
This week we present our Portfolio Allocation Summary for June 2023.
This week we present our Portfolio Allocation Summary for May 2023.