JAAA - A Quick Look At The Most Important Fixed-Income Asset Classes

2024-04-29 15:45:44 ET

Summary

• Federal Reserve hikes have led to sharply higher yields across bonds and fixed-income sub-asset classes.
• Some have seen their yields rise by more than average, including short-term bonds, senior loans, and CLO debt tranches.
• Spreads have also changed, tightening across the board.
• Understanding these issues might help investors select the best type of bond or fixed-income security for their portfolios.

In keeping with my continued coverage on bonds and bond funds, I thought to have a quick look at each of the major fixed-income asset classes. Doing so helped me understand how things stand in the market right now, and hopefully will help investors in the same way.

Bonds Overview

In general terms, almost all bonds and bond sub-asset classes trade with good, above-average yields right now. Due to this, bonds are a broadly attractive asset class and a broad buy. There are some differences between bond sub-asset classes though, which impact their relative attractiveness. Per data from JPMorgan (NYSE: JPM ), take special note of the spread between current and historical yields for the different bond sub-asset classes....

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