Junk These ETFs?

Featuring Max Wolff

Max Wolff, chief economist at The Phoenix Group, explains why he thinks U.S. high yield bonds are massively overbought. He discusses two ETFs and key levels to watch in this interview with Justine Underhill. Filmed on June 21, 2018.

Published on
26 June, 2018
Topic
ETF, Bonds, Trading
Duration
12 minutes
Asset class
Bonds/Rates/Credit, Equities
Rating
16

Comments

  • JC

    James C.

    28 6 2018 01:54

    0       0

    I like his thinking and enjoyed the video, but the trade itself doesn't make sense.

  • LT

    Lucas T.

    26 6 2018 22:48

    5       0

    So let me get this right: Short high yield with a 10% profit target that has a 5.5% cost of carry in an instrument that is showing relative strength as a flight to safety...?

    I am guessing this guy's portfolio is a statement about his views on the president, and may feature some cognitive dissonance.

    • LC

      Liliana C.

      27 6 2018 04:39

      1       1

      Received several emails from HF managers saying now is the time to buy HY. I think 🤔 some junk maybe ok but my bigger concern is that asset allocators may actually buy into the narrative.

    • RK

      Robert K.

      27 6 2018 09:04

      1       0

      Yeah the setup not super comfy. But why not execute this idea by buying an OTM Put @ 80. It costs ~$ 1.20 with an implied vol really low actually (~10%). I think I will execute this.

    • NI

      Nate I.

      28 6 2018 03:58

      0       0

      The carry cost was my first thought. The scenario has to materialize quickly or you won't make much.

  • AA

    Aymman A.

    26 6 2018 14:35

    1       0

    Brilliant!

  • SS

    Sam S.

    26 6 2018 12:54

    2       0

    Hey Max, if hot high yield as a mistake, what do you like for parking those funds coming out of emerging markets?

  • RM

    Ronnie M.

    26 6 2018 12:06

    6       0

    Thanks, Max. Appreciate your balanced views on this and fully agree that risk is not priced into US high yield. I wonder what your view is on European junk relative to this trade idea?