How Is the “Retail Apocalypse” Impacting Bond Markets?October 10, 2019
- The dramatic growth of internet retail is affecting certain segments of the bond market, including commercial mortgage-backed securities and corporate bonds.
- E-commerce has weighed heavily on brick-and-mortar retailers’ revenues and profit margins, so we have largely avoided corporate bonds in this sector.
- E-commerce has had a nuanced effect on commercial mortgage-backed securities, making close analysis of the deal structure and underlying properties essential.
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All investments are subject to market risk, including the potential loss of principal. Fixed income securities are subject to credit risk, liquidity risk, call risk, and interest-rate risk. As interest rates rise, bond prices generally fall.
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