Illiquid bond markets have been derided by certain market participants for some time now, with an increase volatility and “flash events” being a particular concern. Now this lack liquidity could lead to the “worst quarter in history” for bond funds, according to one market participant. Liquidity is thin in debt markets, notes Loomis Sayles executive Dan Fuss While debt-based hedge funds had bet on bond prices falling and were confronted by investors increasing exposure to junk debt funds in February, it is the lack of liquidity in markets that is a problem for fund profitability. “The market is going, I…
Some Debt Investors Struggle With Illiquid Bond Markets
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.