Quick Take: Look to High-Yield U.S. Corporate Debt
NEW YORK (TheStreet) -- TheStreet's Gregg Greenberg discussed the recent move in bonds and where investors can still find value with James Kochan, chief fixed-income strategest at Well Fargo Advantage Funds.
According to Kochan, the spike in bond yields does not indicate the start of a bear market. He said the 10-year Treasury yields are in a "normal" range and are still relatively low, historically speaking.
Despite outcries about possible manipulation by the Federal Reserve, Kochan doesn't necessarily agree. He said that while the Fed certainly has a "pronounced influence" on mortgage-backed securities, it has less of an influence in Treasuries. More of an influence has been foreign buyers of U.S. debt -- they've been doing more selling than buying, he said.
Greenberg pointed out the instability currently seen in emerging markets. Kochan said he's not sure what people see there. "You're not getting paid all that much" to own emerging market debt, relative to other areas of fixed income, he added.He thinks that high-yield domestic corporate debt has a better balance of risk to reward. He also likes A- and BBB-rated municipal bonds. -- Written by Bret Kenwell in Petoskey, Mich. Follow @traderboy23
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