Surge in 'risk-free' treasury yields sends bond investors in search of better opportunities
JoAnne Bianco, a senior investment strategist, expressed concerns about the risks associated with rising treasury yields on CNBC's podcast. She recommends that fixed income investors focus on the intermediate part of the treasuries curve and explore opportunities in investment grade and high yield markets. Bianco believes that strong corporate fundamentals currently mitigate default risks, making BBB-rated corporates an attractive option for income-seeking investors.
- ▪JoAnne Bianco highlighted that the so-called risk-free rate carries significant risks.
- ▪She suggests focusing on the 5-year to 7-year range of treasuries to avoid price volatility.
- ▪Bianco noted that BBB-rated corporates offer a coupon income advantage that leads to outperformance.
Opening excerpt (first ~120 words) tap to expand
JoAnne Bianco, senior investment strategist at BondBloxx Investment Management, voiced similar concerns on CNBC's "ETF Edge" podcast this week. "You are calling it the risk-free rate. It is not risk free. There is a lot of risk associated with this," she said."Now the next likely action is they are going to be raising rates at some point, potentially starting later this year," she said.The bond market action leads Bianco to make two recommendations for fixed income-focused investors. While a higher yield offers investors more income, it also punishes bond prices. Bianco suggests investors focus on the intermediate part of the treasuries curve, specifically the 5-year to 7-year range.
…
Excerpt limited to ~120 words for fair-use compliance. The full article is at CNBC — Top.
Discussion
0 commentsMore from CNBC — Top
