![]() ![]() Now that yields have risen, our original draft is hopelessly dated. We warned that, despite the fascination of the investment fashionistas with deflation and negative yields, the actual risk was that yields would unexpectedly rise. Our problem was that we had dedicated our original draft to lecturing our patient readers on the ridiculously low level of bond yields. Yields reversed their entire year-to-date decline by early May. Those bond managers with longer duration portfolios had great performance but they did not have much of a chance to celebrate. By March 31st, yields were up from the lows but bonds still had a pretty good quarter due to price appreciation. How so? Well, we always say that a picture tells a thousand words and the chart below destroys about a gazillion of them, including our working draft.Īs inspection of the chart above shows, global bond yields plunged unexpectedly in January with the 10 year U.S. Our delay turned out to be a rather good thing for these pages, however, since most of what we wrote in early April is now completely and utterly irrelevant. We weren’t happy with our creative recipe and something was definitely lacking in our ingredients. We must admit to more than our normal share of dallying and navel contemplation with this edition. ![]() As we typically get the Corporate Bond Letter out a week or two after the Canso Market Observer, which was published in early April, we are indeed tardy in our authorship. Our more observant readers have probably noticed that the masthead on this edition is May 2015 versus April. Despite the vociferous urging of our client service colleagues, and they are rather good at being vociferous, we ran quite late with this edition of the Canso Corporate Bond Letter. ![]()
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