Market graphic: spread decompression

Market Graphic

In February equity markets sold off, sparked by a significant drop in Chinese equities and followed by negative news out of the subprime mortgage market. In the corporate bond market, investment-grade and high-yield credit spreads widened as equities traded down, although investment grade underperformed high yield due to increased exposure to housing-related issuers.

From a historical standpoint, IG outperformed HY in 2003, 2004 and 2005. We estimate that a carry-neutral strategy involving se

To continue reading...

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: