|Bid||0.00 x 46000|
|Ask||0.00 x 3000|
|Day's Range||23.01 - 23.05|
|52 Week Range||22.96 - 23.32|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.63%|
Keith Bliss of Cuttone and Company joins Yahoo Finance's Alexis Christoforous from the floor of the New York Stock Exchange to discuss the Federal Reserve release of the minutes of the last FOMC meeting.
Alan Valdes, Director of Floor Operations at Silverbear Capital, joins Yahoo Finance's Alexis Christoforous from the floor of the New York Stock Exchange to discuss Q3 earnings and if investors have gotten too optimistic.
Due to their floating rate component, bank loans are seen as an attractive alternative to traditional high-yield corporate bonds in a rising rate environment. Bank loan securities allow their interest rate to shift, or float, along with the rest of the market, whereas a fixed interest rate stays constant until maturity. Investors, though, should not forget that senior bank loans are denoted high-yield because the issuing firms are highly leveraged, and highly leveraged companies are more at risk of default and bankruptcy.
In this time of uncertainty surrounding the path of interest rates, floating rate bonds can be a good way to reduce benefit from interest rate hikes, without giving up much income today. Three-month LIBOR, the benchmark rate for most FRNs, is at 2.34%, which is high, by historical standards, versus other short-term rates like three-month T-Bills. You could buy bonds of individual companies, though you then need to do the credit work.
In today's rising-interest-rate environment, senior loan funds' low-interest-rate risk and enticing yields have made them alluring. Senior loans' yields go up in lock step with short-term interest rates, offering an effective duration hedge, but they come with significant credit risks, as most of these loans are issued by companies rated below investment grade. Since 2010, their credit risk has gradually crept up.
Speculative-grade corporate bonds and junk bond ETFs are picking up again, revealing the ongoing appetite for higher yielding bonds despite rising rate risks, large fund outflows and risk-off concerns. ...
Private market credit, peer-to-peer lending and senior loans have similar risk profiles to traditional fixed-income securities.
The PowerShares Senior Loan Portfolio (BKLN), an exchange-traded fund, would seem to be ideal for investors worried about rising interest rates. Bank loans are adjustable-rate securities with coupons pegged to the London interbank offered rate, or Libor, a benchmark of short-term rates for loans maturing within one year. Libor rates have moved up as the Federal Reserve has raised short-term rates over the past year: One-month Libor is now about 1.7%, up from 0.8% a year ago. Part of the problem is that loan coupons don’t change until Libor surpasses certain levels, notes Peebles.
Income. It’s what retirement is made of. And while the Federal Reserve has been dialing up interest rates, finding big income from traditional sources is still hard to come by. Money market funds, CDs and even 10-year Treasury bonds aren’t paying much of anything these days. For income-starved retirees, getting a paltry sub-2% isn’t going to cut it. Finding better income solutions is a paramount concern.
The intensity of recent volatility captured the top spot on the list as investors ponder a return to the markets. Technology stocks have recouped most of the losses from the start of the month, while the signed bill that grants a hike in military spending continued to drive interest towards the aerospace & defense sector. The recent sharp rise in government bond yields also caught attention as well as high-yield bonds, which trended thanks to a growing desire to diversify away from more volatile assets.
With investors continuing their search for income and yield, bank loan or senior loan exchange-traded funds are seeing some renewed interest. The largest bank loan ETF is the PowerShares Senior Loan Portfolio ...
John Davi has a long track record of providing macro insights for major institutional money managers. He spent 18 years working for Morgan Stanley and Merrill Lynch. Now, he’s bringing his expertise to the ETF strategist space, opening this month Astoria Portfolio Advisors, looking to bring institutional-caliber investing strategies to retail and advisor clients.
Over the past two months, high yield bonds have managed to disengage themselves from the daily volatility of the crude oil market. Whether this is good or bad going forward is the question.