High Yield Bonds Not as Attractive Any More

High yield bonds were battered during the Covid-19 crisis, attaining extreme (positive) levels of “cheapness”, as depicted by our proprietary valuation metric for high yield credit spreads.

From a maximum “attractiveness” reached last March, spreads settled back to more neutral valuations (represented by the zero line) in early June, and are now back in slightly positive territory. At this point, they are much less attractive than they were two months ago.

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