WE WILL ADD TO US JUNK BOND ALLOCATION ON DIPS
Our Multi-Asset Global Allocation Model has been 20% long on US junk bonds since Oct 26, 2009. We have also been 10% long on US Senior Bank Loans. This allocation has not only contributed high single digits yield bu, but also capital gains. Senior Bank Loans have provided 15% capital gains over this period of less than four months. Recently, some of the capital gains on high yield bonds have been lost. According to Lipper, last week nearly $1 billion was withdrawn from US funds that hold high yield bonds. Spreads from US treasuries have widened by more than 100