Market Vectors’ Fran Rodilosso on the Case for Hedged High Yield Bonds vs. Bank Loans in a Rising Rate Environment

NEW YORK--(BUSINESS WIRE)--Both hedged high yield bond and bank loan strategies can help limit risks associated with a rising interest rate environment, according to Fran Rodilosso, fixed income portfolio manager with Market Vectors ETFs. However, hedged high yield bond strategies outperformed bank loan strategies during 2013’s rising interest rate environment1, spurred on by the summer’s “taper”-focused concerns and the ultimate tapering that took place in December. Rising over 100 basis points each since the beginning of the year, the 5-year and 10-year Treasury yields closed 2013 at 1.75% and 3.04%, respectively. A summary of this concept can be found on the firm’s site at http://www.vaneck.com/library/viewpoint.