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BlackRock Fixed Income Chief Strategist Jeff Rosenberg on why investors should consider corporate bonds for their portfolios.
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-- up this term bond.
It's got a million definitions not all bonds and bond deals are bad companies are selling bonds near record rates to get some money to -- to throw it on Monday.
I asked Howard what that chairman and CEO of Cantor Fitzgerald what his best trait is right now it involved bonds this is what he -- I like corporate bonds for the guys who come and see me and say you know I need a good return but I don't wanna -- so much risk.
Okay we said let's get in on this discussion should you be buying in and how joining us now in a Fox Business explicit this Jeffrey Rosenberg.
BlackRock fixed income chief investment strategist.
We have looked and we have seen that equity based hedge funds and some mutual funds have actually had somewhat low performance recently.
Corporate bonds are different animal explain to people why and how they might be a better investment right now well corporate bonds.
Are just a different.
Type of investment altogether in the sense that you get some interest rate risk and you get some credit risk in the credit risk piece is really what's making corporate bonds work in this environment why.
Because of what the Fed is doing you have a world of quantitative easing.
Of ample excess liquidity and wide as.
-- company default.
Weird is default risk come from a comes from the inability first and foremost roll over your debt there is no.
Problem with rolling over debt to default risks are very low and so corporate bonds as an asset class -- been a very good and.
So companies out there you name it Ford Coca-Cola a big one small wants.
They go to the market they float these corporate bonds so that they can get money doesn't -- so we started to see some real trends Monday the flows were about.
Ten billion dollars where.
Corporations were coming out and wanting to -- that much and they found it Wednesday or Tuesday rather four billion dollars it seems like there's a very active market right now how does the retail investor get in on this.
So the retail investors access to corporate bonds varies depending on the spectrum so some direct investment to in some of those large names -- -- names like Ford.
Have direct issuance programs at your high quality issuance those -- low relatively lower yields then.
The other segment of the corporate bond market which is the high yield bond market high yield bond market investors.
Are better off to access those parts of the market through -- vehicle mutual fund -- HYG which is an ETF.
RE TF.
For the high yield asset class -- -- -- pool vehicle when you're going to high yield because you want more diversification to protect you from the walk that exposure coming up we're gonna show you that ATF -- just a medical take a quick break more with Jeff Rosenberg.
