It a very touchy time in the bond market

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Feb 8 (IFR) The recent rise in Treasury yields has led to a surge of interest in shorter dated debt in the high canadian goose jacket yield market, as investors look to protect themselves from duration risk.

cheap Canada Goose In the past couple of weeks, a variety of issuers have responded by pricing five or six year bonds with call dates of around two years or three years, at which point the company is allowed uk canada goose outlet to redeem the bonds at a specified call price. cheap Canada Goose

are playing to the appetite of the market, and that is not for longer dated fixed income securities at these extremely low yields, said Dan Heckman, senior fixed income strategist canada goose store at US Bank Wealth Management.

Canada Goose online The canada goose homme black friday average canada goose clearance sale yield to worst hit 5.61%, its lowest point ever, on January 24, but has since widened to 6.01% as the market has reacted to rising Treasury yields. Canada Goose online

Buy side participants have been refocusing their strategy in both the secondary and primary markets to adapt to the changing climate.

need Canada Goose Online to be careful and dance around the higher risk areas of the market from a credit and duration perspective, said Heckman.

Canada Goose Parka doesn take much of an uptick in default rates for high yield canada goose black friday sale to be affected. It a very touchy time in the bond market. We would be shortening duration here and taking a little bit of a breather until we see a better buying opportunity. Canada Goose Parka

Canada Goose sale SHORT AND GETTING SHORTER The shorter tenor canada goose made up almost half the deal flow last week. Of the 38 Canada Goose online tranches priced across the canada goose factory sale globe, 17 Canada Goose Coats On Sale had five year to 6.5 year maturities. Canada Goose sale

buy canada goose jacket That included US dollar deals for uk canada goose NCL Corporation, Talos Production, Permian Holdings, Nord Anglia Education, Global A Electronics and Beazer Homes. buy canada goose jacket

Canada Goose Outlet This week, Canadian waste management company Tervita Corp priced a Canadian/US dollar split currency offering that will mature in 5.75 years, callable in 2.75 years. Canada Goose Outlet

canada goose deals Cantor Commercial Real Estate priced a US$250m five year non call two senior unsecured offering. Alliance Grain Traders came with a five year C$125m private placement offering, priced yesterday, with the call structure revised to three years instead of two. canada goose deals

canada goose coats on sale No surprise either, that short duration bond funds are also growing in popularity. These funds have an average maturity of around two to 2.5 buy canada goose jacket cheap years. canada goose coats on sale

canada goose clearance sale Ultra short bond funds, with average maturities of less than a year, are also available. These typically offer higher yields than money market instruments with less price volatility than a typical short term fund. canada goose clearance sale

David Sherman, founder of Cohanzick Management, manages the RiverPark Short Term High Yield fund, which has an average maturity of less cheap canada goose uk than six months. The fund targets investors seeking a very limited interest Canada Goose Jackets rate risk. It has generated a 4% annual return since its inception in September 2010.

canada goose black friday sale Sherman expects that if interest rates go up gradually, high yield will perform better than other areas of fixed income. canada goose black friday sale

canada goose coats though junk bond yields are canada goose uk outlet at historic lows, the spread over central bank manipulated Treasuries is reasonable and should provide some cushion in a rising rate environment. canada goose coats

buy canada goose jacket cheap Still, investing in this area it is not entirely without risk. buy canada goose jacket cheap

you don manage it appropriately, there is a lot of risk being involved in a short duration fund, said a short duration fund manager. can just Canada Goose sale say short duration is a flight to safety. The flight to safety is picking the right bonds.

canada goose store Of particular concern is the risk of a default scenario. Assuming an canada goose uk shop appropriate yield curve, a shorter canada goose clearance term canada goose coats on sale bond would typically trade at a much higher dollar price compared to a longer term bond in the same complex. In a recovery, this means that there is far more downside for the short term paper. canada goose store

you pick the wrong bonds, you are going to get destroyed, said the fund manager.

canada goose With the Fed keeping rates so low, the yield curve for high yield is a lot steeper than usual and so high quality, short duration high yield paper comes with a lower yield. canada goose

Canada Goose Jackets may not be as attractive as it used to be from a yield standpoint but you have considerably less Treasury risk, which is compelling for investors in this Canada Goose Outlet environment, said Michael Anderson, chief high yield bond strategist at Citigroup. Canada Goose Jackets

One banker said he has seen a spike in interest for new five year issues among short term investors because of the current tight canada goose coats secondary spreads.

of this short term debt, which includes yield to call paper, is hard to find or get at a reasonable price, so short term managers are finding value in the primary Canada Goose Parka market.

these shorter maturity new issues, we seeing a whole different buy canada goose jacket buyer base, he said.

While five year paper has spiked in recent week, the average maturity of the high yield market has shown a steady decline since the credit crisis as the overall appetite for risk faded.

Sherman of Cohanzick said this suggests that the performance of short term high yield funds should be more correlated with the overall high yield market than in the past.

canadian goose jacket According to the BofA Merrill US high yield index, the average maturity in the high yield market has dropped from a cheap Canada Goose decade high of 8.5 years in late 2005 to the current average of 6.5 years. When adjusted for bonds trading to the yield to worst call date, the average maturity drops canada goose uk black friday to 5.25 years canadian goose jacket.