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


  1. Jake,

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

  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.