Week of September 22, 2014 - High Yield
In recent months, the high-yield (HY) market has experienced repeated fits and starts that appear to be based on both valuation and technical factors. In late July, the asset class experienced record retail withdrawals accompanied by a sharp sell-off, as the Citi High-Yield Cash-Pay Capped Index 1 fell 1.32%. However, August saw improving bids for high-yield bonds, along with minimal new supply, a solid quarterly earnings season, encouraging data on business expenditures, alleviating US inflation/rate concerns and increasing speculation around European Central Bank action post-weak growth and tepid inflation data.
September has thus far proven very different. Post-Labor Day new-issue volume has been an overhang on the market as $29.7 billion of HY bonds have been priced month-to-date as of September 17th. Issuance has been historically strong during September, with $55 billion and $47 billion priced during the month in 2013 and 2012, respectively. With issuance tapering off from the start of the month and recent issues being priced more attractively, the HY market has now had the chance to absorb supply. This dynamic is resulting in stronger bids for both new issues and existing bonds.
Irrespective of short-term price movements, DoubleLine's high-yield strategy for its open-end funds is rooted in selecting stable-to-improving credits on a bottom-up basis and finding relative value opportunities within industry sectors. This involves upgrading the portfolio from either a credit quality or yield/spread basis in order to attempt to maximize total returns.
1 Citi High-Yield Cash-Pay Capped Index - An index that represents the cash-pay securities of the Citigroup High-Yield Market Capped Index, a modified version of the High Yield Market Index, by delaying the entry of fallen angel issues and capping the par value of individual issuers at $5 billion par amount outstanding.
One may not directly invest in an index.
Jeffrey Gundlach - DoubleLine Overview
Bank Loans vs. High Yield
Fixed Income Asset Allocation
Global Developed Credit - Floating Rate
Low Duration Emerging Markets
Mortgage-Backed Securities - Total Return
Shiller Enhanced CAPE®
US Housing Market
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8-15-14 CNBC "DoubleLine's Gundlach: Could see U.S. 10-year yields go to 2.2%"
Click here to view video
02-12-14 "Gundlach: QE will not end in 2014"
02-12-14 "Gundlach: Market has discounted tapering" http://video.cnbc.com/gallery/?video=3000245506
04-14-14 "Housing Finance Reform"
Information presented was current as of the date the material was prepared by an outside party. DoubleLine assumes no duty to update this information.
Documents and Commentary
- Beyond the Mirage of Benchmarks: A Better Investment Framework for Emerging Markets Debt
- The Blind Leading the Blind – Multi-Asset Growth Strategy
- 10 Frequently Asked Questions about DoubeLine Shiller Enhanced CAPE®
- Taper, U.S. Rates and Emerging Market Currencies: Can U.S. Economic Growth Weather the Storm?
Thursday, September 11, 2014 at 1:15 pm PT / 4:15 pm ET
"Opportunistic CMBS/CRE Strategy Launch"
No replay available.
Tuesday, January 8, 2013
Jeffrey Gundlach "2013 Market Outlook: Year of the Snake"
Click here for Webcast Recap (pdf)