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Bonds Still a ‘Buy’ for Investors?

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  • Description

    Loomis, Sayles and Co. Vice Chairman Dan Fuss on the outlook for the bond market.

  • Duration 3:59
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Shortly -- interest rates are at record lows inflows into bond funds are at near at or near record levels.

So there isn't a crowded trade and has the bond market been picked over my next guest still sees opportunity in the bond market Dan -- Loomis Sayles and company vice chairman and co manager of the Loomis Sayles bond fund.

Is -- -- you've seen.

Different business cycles obviously -- it.

It but at this time what we're saying as a -- change in corporate debt.

Corporate -- is actually you know hitting new new lows the balance sheets are looking pretty good at -- -- companies what does that mean though for high -- Well it -- somewhat indiscriminate buying because of the funds -- a lot of high yield money is targeted to high yield it comes in via the mutual funds.

And what -- reporter on -- separate accounts that you have to buy.

-- -- investment grade it and sell it goes in.

And as a result even though the credit cycle -- only be 56 quarters -- call -- Companies with more leveraged balance sheets can still refinance.

At lower rates so it's it's going on -- funds wolves -- care.

You know what we've seen it right now that rates at record -- difficult for the income investor this CD investors -- they've been looking.

You know deeper into the bond market as -- -- -- you know looking for those those better returns in May be getting.

-- about what happens though when interest rates do go up even if -- is before 2014 I know another fed says 2015 but.

Right it's B Franken -- -- could -- job.

-- yes it could.

Well when interest rates start out it becomes better news for the savers in worse news for people that need to borrow takes money.

And at first not too bad but as -- pushes time.

Then it -- very different call now we haven't seen this in a long long time except in short spurts you know three months here -- -- there.

Pop the world changes.

Actually -- -- like who opted.

In the markets.

Interest rates -- -- that made it tougher and tougher and tougher for companies.

To borrow money unless they were very profit.

-- -- -- there are reinvesting to build more widgets that's fine.

But they better be the low cost producer and number 45 will leverage balance sheet.

Date in essence had to stop -- You know -- things that we're gonna see you know is is it is.

Individual sectors.

Out -- in the world of hiking -- specific sectors that you like do you think we'll continue to perform and -- 2013.

In 2013.

Most of OPEC well -- take -- and if you look favour.

And all if I did I'd never talk about it and it's because the world would then anticipates.

Look at where a large managers in the area -- eighty billion Iberia.

Okay what do you think that we've also seen the outlook for 2013.

-- -- got this fiscal -- discussion going on you know you know treasury seem to -- now falling out of -- the very popular for so -- but recently that in the treasury market has been kind of a pullback due out that the fiscal -- something.

Phenomenon in the treasury market is the literally dominated by the central banks are not just a -- but it's the -- -- central banks plus our own Central Bank.

Really while they buys a net increase in US treasury debt -- past two years.

It's very supportive -- and as long as thing about it that it.

Yeah as long as they want to not ugly things can happen but.

The world's central banks the big ones are doing the same thing.

So you don't sweat the currency relative to the other major currencies relative to the.

None major currency that's another matter a lot.

Banks -- a lot of money in the pouring it into and this market and other Bryant bus thank you very much you're welcome the sale you at a company vice chairman at Loomis -- and thank you closing.

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