Specifically, an Obama victory will stoke fear of higher taxes on dividends and ordinary income, and drive a rotation out of investment grade and high-yield corporate bonds and into municipal bonds.
Rogge thinks investment-grade and high-yield corporate debt, for example, are attractively priced for a difficult environment.
Guggenheim Investments filled that gap with its BulletShares ETFs, a menu of investment-grade and high-yield corporate-bond funds.
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The multitudes of bond haters continue to screech about how overvalued Treasurys and investment-grade and high-yield corporate bonds are, but some split-rated bonds deserve to be in your portfolio.
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Despite the rather dour comments from Lockhart, the tide appears to be shifting in the corporate bond market as liquidity has begun to return and both investment-grade and high-yield premiums over Treasury yields have begun to narrow in recent sessions.
We looked back over the period stretching from January 1, 1997 to February 29, 2012 to see how movements of stocks, Treasuries and lower-grade fixed income investments like high-yield bonds and bank loans, related to each other.
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For one, liquidity remains strong in the corporate bond market, as spreads in both high yield and high grade corporates have remained relatively tight.
The market now expects domestic Japanese Government Bond (JGB) holders to cash out and seek higher yield solace in U.S. Treasuries and other high-grade foreign bonds.
In the year to date, loans are running in the middle of the pack, trailing equities and high-yield bonds, while beating 10-year Treasuries and investment-grade corporate bonds.
In seeking to achieve its investment objective, the Fund will invest in senior secured loans, high yield corporate bonds and investment grade-rated collateralized loan obligations.
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Emerging market and investment grade bonds have sold off in the last few days, and the dollar high-yield index has plateaued, but European high-yield has remained on course, edging higher.
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Even junk issues have been inhaled by investors desperate for any yield pick-up over puny Treasury and high-grade bond yields.
Active managers in intermediate-term securities fared better than managers in long-term securities, and managers in investment grade bonds fared better than managers in high-yield securities.
Spreads on both investment-grade credit-default swaps (insurance against bond default) and on high-yield indices have increased sharply.
Another bull on high-yield bond funds is Jack Bowers of Fidelity Monitor, who is recommending Fidelity Strategic Income (nasdaq: FSICX - news - people ), which has 40% in high-yield debt, tempered by 60% in foreign and U.S. investment grade and government issues.
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