All closed end funds, EAD is a closed-end high-yield bond
fund that seeks a high level of current income, ERC is a closed-end income fund that also aims at a high level of current income consistent with limiting its overall exposure to domestic interest-rate risk, ERH is a closed-end equity and high-yield bond
fund that seeks a high level of current income and moderate capital growth, with an emphasis on providing tax-advantaged dividend income and EOD is a closed-end equity and high-yield bond
fund that aims at a high level of current income and a secondary objective is long-term growth of capital.
And while the risks are still very real, high-yield bond
funds continue to deliver hot returns.
Summary: EMEA high-yield bond
issuance reached $118 billion in 2014, on par with 2013 issuance.
Currently, high-yield bonds
--IOUs issued by companies with dubious credit ratings--yield about 5%, which isn't high by anyone's standards, including those who manage high-yield bond
Unlike actively managed ETFs, most high-yield bond
and senior loan index ETFs track passive benchmark indexes that allocate capital based on the market value of index constituents' out-standing debt.
HSBC Holdings (LSE: HSBA) has announced that it has hired a head for its high-yield bond
sales in the US.
The high-yield bond
market is a lower-risk alternative for investors worried about top-line growth in a sluggish economic atmosphere.
Kerling PLC (Kerling), a subsidiary of Ineos Group Limited, is planning to launch EUR785m high-yield bond
1 billion of high-yield bond
and bank debt, according to S&R That is greater than the dollar value of defaults in 2006 and 2007 combined, and it's more than 25 percent of the $157 billion of high-yield-loan and bond defaults in all of last year.
CREMAC originally had intended to pledge the entire portfolio as collateral in an upcoming collateralized debt obligation (CDO) offering, but the high-yield bond
market conditions improved dramatically, making liquidation into the market a far more attractive alternative.
Another test, however, strongly indicates that from the investor's standpoint, there is a sizable equity component in a nonconvertible high-yield bond
On the other side of the coin, if the economy fails to accelerate, your high-yield bond
position could be crimped, but the rest of your portfolio would hold strong.