Tag Archive: High Yield Sterling Bonds

Mar 15

Do high yield bonds outperform other asset classes? The race begins….

Over the course of the current (2015/16) financial year, I have built up a portfolio of 12 of the highest yielding Sterling fixed-income securities generally available to a retail investor. These securities are held in an individual savings account (Isa). This is important, as it means that all interest accrues free of tax. As at …

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Feb 16

Who’s afraid of the big bad bear?

An air of despondency hangs over the City of London, with security markets in steady decline, dragged down by the collapse in international commodity prices. In Aberdeen, Britain’s oil capital, the atmosphere is closer to panic. Property prices are tumbling, and many who want to sell are finding no buyers at all. In late January, …

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Nov 10

Schumpeter, Minsky and me: Long waves in British financial markets – Part 2

My analysis indicates that we are now in the downswing of the fifth long wave in British financial markets since the Industrial Revolution. The upswing ended with the international financial crisis of 2007–09, and one would expect that the downswing will endure for between 20 and 25 years and evolve in two phases, each lasting …

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Oct 13

Palmerston, Kondratieff and Me. Long waves in British financial markets.

The Victorian statesman Lord Palmerston once observed of the Schleswig-Holstein question that it was so complex that only three men had ever fully understood it. One of them had gone mad, the second had since sadly died, and the third was himself – but it was so long ago that he had completely forgotten the …

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Sep 11

Premier Oil and the High Yield Hypothesis

During market dips, it is worth recalling the words of Warren Buffett – “Be fearful when others are greedy; be greedy when others are fearful.” Security prices go up and security prices go down, but the coupons paid on bonds go on forever – steady, predictable and reliable. While they offer no upside beyond the …

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Aug 10

In Praise of Preference Shares

Preference shares are today a relatively neglected instrument of corporate finance. The current conventional wisdom of the City is that they offer none of the upside of ordinary shares and none of the tax advantages of loan notes. I have an alternative perspective. True, preference share dividends are not tax deductible, unlike loan interest payments. …

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Jul 15

The Structure of the London Fixed Income Market

A rapid recapitulation of the high yield bond system: The objective of the system is to establish whether a diversified portfolio of high yield bonds outperforms other major asset classes. This premise is being tested through a designated Isa, into which one-twelfth of the annual Isa allowance is subscribed each month, and then used to …

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Jun 09

Eros International – the paradox of a low risk, high yield bond

It is a sign of the times, and the remarkably benign conditions prevailing in the London securities market, that no less than 103 of the 106 corporate bonds quoted on the LSE’s Order Book for Retail Bonds (ORB) are trading above their par value. This isn’t entirely good news for a bond investor. First and …

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Apr 09

Rating Agencies and Bond Mispricing

As reported in March, over the coming months this site will report results of a real-time experiment in high yield bonds. Casting an eye over potential candidates for the High Yield Portfolio, my attention was caught by two rather curious features of the Co-operative Bank’s 11% Subordinated Loan Notes. These notes were issued in December …

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