During the darkest parts of 2009, it took some serious grit to step into the breach and buy high yield bonds. Early investors were contrarian and made substantial sums.
By January 1st, the cat was well out of the bag, and high yield had been back in style for a while. Yet investors still made money by simply getting on board, especially for the worst rated bonds. Returns continued to rise in 2010. (Chart via Econompic)
This trade is getting crowded. Fund flows into high yield increased year over year in Q1 of 2010, and $972 million dollars just flowed into high yield during the week ending April 2nd, according to EPFR Global.
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