A Question of Junk

When I discuss the high-yield bond market with other bond traders, the discussion tends to center around spreads. But when I talk to investors, the conversation is about the absolute yield. Which is the right way to look at the junk bond market? Are bonds traders myopic to the risks of rising rates? Or are investors naïve about how bonds really work? In my fund, I'm supposed to be trying for absolute return and I trade high-yield actively, so this question is something I've thought about a lot. I can't just accept the relative return implied by spreads.

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