
Bond Style Rotation
Bond Style Rotation
The following table shows the performance of investment grade
vs. high yield bonds on a calendar year basis.
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Notice the following:
- Once a quality segment begins to outperform, it tends to due
so for several years,
- The performance difference between investment grade and high
yield bonds may be significant and,
- By tilting a portion of the bond portfolio to the in-favor style,
an opportunity to add value is created.
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