The global stock market recognized that global economic recovery was underway in the first quarter of 2011. Stocks moved higher but bonds struggled with the idea that the “normalization” of monetary policy and higher interest rates were at hand. The bond market decided to “get ahead” of the central banks and bond yields moved higher. The coupon on bonds was not enough to offset their price decline from higher yields. For investors used to their bonds only rising in value, this was something of an epiphany.
Read the full newsletter at the link below.Canso April 2011 Corporate Bond Newsletter