Why You Need To Know About the High-Yield Bond Market

Real Vision: Finance & Investing

Real Vision

Business News, Business, Investing, News

4.1 • 1.1K Ratings

🗓️ 19 April 2022

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

“The Fed has been in the business of suppressing volatility in financial assets for most of the post-Global Financial Crisis period,” notes Bill Zox, “but they are out of that business now.” According to Zox, co-portfolio manager at Brandywine Capital, tighter financial conditions to contain inflation mean wider credit spreads and lower equity prices. Zox joins Maggie Lake for today’s Real Vision Daily Briefing to talk about opportunities for investors in the high-yield bond market amid unprecedented uncertainty at the macro level. War in Eastern Europe has only added to global inflationary pressures. But close to 20% of high-yield is in energy companies and other commodities producers that benefit from an inflationary environment. And inflation is good for credit quality, as the value of fixed-rate debt declines and principal and interest payments are made in inflated dollars. As Zox explains, high-yield can be hit particularly hard by volatility and illiquidity. But, as long as you can hold through these periods, “this is what creates the long-term opportunity.” Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3MexfLo Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	Are you ready for a Monzo Business Bank account? Mike from Bluewater Plumbing was.
0:05.0	I need to get paid quickly, especially when I have five or six plumbing jobs in a day.
0:08.0	When I first used the payment link feature in my Monzo Business account,
0:11.0	I was impressed to how quick and easy it was. At the end of each job,
0:14.0	I'll just create a payment link, send it to the customer, and get paid then and there.
0:17.0	I can also track all of my payments in my get paid tab.
0:20.0	If you're ready for a Monzo Business account, apply today.
0:23.0	Just search Monzo Business, season sees apply.
0:26.0	Only sole traders or limited company directors in the UK can apply.
0:29.0	Hi, everyone. Welcome to the real vision daily briefing. It's Monday, April 18th, 2022.
0:40.0	I'm Maggie Lake. And here with me today's Bill Zox, portfolio manager at Brandy Wine Global.
0:45.0	Hi, Phil. Welcome to real vision.
0:47.0	Thanks, glad to be here.
0:49.0	Yeah, I'm more glad to have you kicking off this week.
0:52.0	I think a lot of people slowly rolling out of what was a holiday week here.
0:57.0	So maybe Vom's a little, a lot of people love kids on spring break and stuff.
1:01.0	So we may have some participants out of the market, but looking at a pretty muted start to the week.
1:05.0	We had some, we had some mild buying, but turned into a mild sell off across US equities.
1:11.0	We've got the 10 year bond yield, kind of anchored at 286 at last check, oil, up, gold, up, crypto mix.
1:18.0	So a little bit of a, you know, you get the feeling everyone's kind of trying to figure out how they want to position here.
1:25.0	And now that we've wrapped the first quarter before we dive in a little bit, Bill, though, why don't you tell us about your focus area and the approach you take to investing in this environment?
1:35.0	Sure. I'm a high yield bond portfolio manager at Brandy Wine Global on a team of three in Columbus, Ohio.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Real Vision, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Real Vision and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.