13 Charts: High Yield Today

By Sloane Ortel and Martin Fridson, CFA
The standard joke about high-yield bonds is that they're not high yield any longer.
People started to tell that joke when the high-yield index fell below 10%. They've continued revising it as the index has moved steadily downward to its present 6%.
So let's replace it with a much better joke: A bond manager has to appear in traffic court for a moving violation. The judge asks, "Don't you know what 'yield' means?" The bond manager replies, "It's been so long since there's been any, I've forgotten."
The judge begins to lecture him: "It's every citizen's duty in our society to understand the laws and obey them. It's a sacred covenant." The bond manager interjects, "I didn't understand that last part."
This joke evoked a chuckle from the audience at CFA Society New York's 28th Annual High Yield Bond Conference. Martin Fridson, CFA, has been organizing and moderating the event for its entire history, starting back "when government bonds were yielding 9% and a respectable high yield credit could be found yielding around 14%." Attendees have come to expect a mix of quirky humor, tactical insight, and portfolio management wisdom.
Enterprising Investor and CFA Society New York hope to transmit healthy doses of each through this experimental format.
What follows are 13 charts interspersed with related commentary from... Read more