This exchange-traded fund is one of the best bargains in the consumer cyclical Morningstar Category.
Interest rates appear poised to rise further over time as the economy improves, creating an environment in which high yield should continue outperforming investment-grade.
Rising rates have pushed bond indexes into the red this year, but high-yield bonds, helped by tightening credit spreads in energy, have bucked the trend.
We continue to expect that high-yield bonds will provide better returns than investment-grade as underlying rates tick up and moderate economic growth holds down defaults.
Undervalued Capital One benefits from improving U.S. consumer and overall economy.
The corporate bond market will probably struggle to return much above break-even in 2014.
The boost from declining rates may be over, but macroeconomic fundamentals in the U.S. should generally be supportive of credit risk.
In Session 1 of the 2013 Morningstar Individual Investor Conference, Northern Trust's Katie Nixon, Charlie Bobrinskoy of Ariel, and Morningstar's Bob Johnson tackle today's macro questions on government policy, economic growth, inflation, and more.
Although the interest rate spread between corporates and Treasuries looks reasonable, because interest rates themselves are so low, corporate bond investors aren't being adequately compensated on an all-in basis, says Morningstar's Dave Sekera.
As retailers have fallen under pressure to start the year, we look at retail ETFs for investors who see a buying opportunity.