About this episode

Erik Aarts discusses the impact of rising oil prices on bond yields and the current state of high-yield bonds.

Erik Aarts, senior fixed income strategist at Touchstone Investments , says the last few weeks have shown a disconnect between stock and bond markets, with the bond markets getting particularly cautious while stocks have raced back to record highs. What the bond market is worried about, Aarts says, is that higher oil prices will bleed into another round of higher inflation. ... At its base case, that's why yields are up today." Aarts also discusses how high-yield bonds are not living so much up to their label as "junk bonds," and that much of that high-risk exposure has moved to or stayed in private credit markets, changing the risk-reward profile of high-yield bonds and making them more attractive than other categories now. For his ETF of the Week, Todd Rosenbluth, head of research at VettaFi , goes in an unusual direction, picking an emerging markets sovereign debt fund that gets poor grade from Morningstar but that Rosenblth says fits the bill for a growing group of investors looking for overseas bond exposure that's tied to the dollar. Wall Street veteran Anthony Gallea, chief executive at Working Profit and publisher of the Working Profit Investment Letter, adds the twist of…

People in this episode

Host: Chuck Jaffe

Guest: Erik Aarts

Topics covered

• oil prices
• bond yields
• high-yield bonds
• inflation
• value investing
• emerging markets

Keywords

• oil prices
• bond yields
• high-yield bonds
• inflation
• emerging markets
• value investing

Mentioned in this episode

Organizations: Touchstone Investments, VettaFi, Working Profit

Books & works: Working Profit Investment Letter

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