Fixed Income

How Is the “Retail Apocalypse” Impacting Bond Markets?

October 10, 2019
The growth of e-commerce is weighing on retailer corporate bonds but creating opportunities in other bond market segments.

Key Points

  • 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.

Please read the transcript at your leisure.

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.