The Asset Allocator: Yield Vs. Safety

Investors have heavily favored bonds over stocks this year, and among fixed-income ETFs, corporate investment-grade bonds have attracted the lion’s share of inflows. Indeed, Seeking Alpha’s bond ETFs page shows that, year to date, long-term U.S. corporate bonds have had the best performance, at 18%. This podcast (5:42) suggests however that if the objective of holding bonds is safety, the extra yield of corporate bonds, despite the substantial yield spread, is not worth the extra risk, as a result of ever poorer credit quality and inflation.Learn more about your ad choices. Visit megaphone.fm/adchoices