Wednesday, September 30, 2009

Full Circle... Treasuries vs. High Yield

Last week EconomPic recapped the amazing returns high yield bonds have posted to date in 2009 after a tumultuous 2008. Below is a chart of that performance on a monthly basis vs. treasuries.



So, where does that leave high yield and treasury investors cumulatively from the beginning of 2008?

Unbelievably in exactly the same place.



Source: Barclays High Yield / Barclays Treasury Indices

2 comments:

  1. Jake,

    There are no bad bonds, only bad bond prices. That doesn't apply to equities.

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  2. An interesting point and Mab makes another one. The thing that strikes me is this is an ecological question - why various relative performance over various timeframes?

    My suggested answer is that the flight to quality moved people (everyone) into quality, Treasuries and short-duration. Once it was clear that the world wasn't collapsing we went from risk off to risk on but that trade, and it is a trade not an investment, looks to be being exhausted! NB: the same logic would apply to Gold btw, at least imho.

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