Skip to Content
Credit Insights

Bondholders Beware

One of the dominant themes this year will be the focus on providing shareholder value, even if it comes at the detriment of bondholders.

Mentioned: , , ,

Last week was relatively quiet in the bond market, as secondary trading was muted and new issue volume declined as we entered earnings season. The Morningstar Corporate Bond Index was unchanged for the week at +136 over Treasuries.

Investors complained that they had a hard time sourcing bonds, as demand from mutual funds--which are flush with cash from inflows--outstripped new issue supply and dealer desks were low on inventory. Even in the face of this demand, investors are experiencing a little sticker shock and were unwilling to push credit even tighter. Spreads remain at the tightest levels since the credit crisis.

David Sekera does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.