Yield Pickup

The extra yield an investor receives when he/she exchanges a bond with a lower yield (and usually a shorter maturity) for one with a higher yield (and usually a longer maturity). While this exchange sounds advantageous, it is risky because the yield pickup often comes from a bond with lower credit quality, and the longer maturity likewise exposes the investor to interest rate risk. However, the yield pickup is still a guaranteed higher return, and many investors take advantage of them. See also: Pure yield pickup swap.

Mentioned in ?

Pure yield pickup swap

References in periodicals archive ?

Gulf bonds provides an interesting opportunity for investors who are looking for a yield pickup, according to Abhishek Kumar, Managing Director, Sector Head -- Emerging Markets Debt, State Street Global Advisors.

A rotation is happening in short-term UAE corporate bonds

However, maybe some of the buying that's boosted Treasuries could provide some support this afternoon, especially given the 26.5 bp yield pickup versus the January sale, and the near 250 bp gain versus the German maturity.

Treasury 7-year auction preview: the sale should see about average results

"This investor portfolio rebalancing for yield pickup increases the potential for excesses in certain segments of the financial and real asset market," he said in an e-mail to reporters.

PH assumes cautious stance on Fed

Corporates, meantime, offer some yield pickup, although sub-investment grade and peripheral Europe looks extended.

Markets carry on regardless; Despite a quarter of geopolitical stress, the markets reported a good performance in most asset classes, reports CHARLES NICHOLSON

We live in a very low interest rate environment and investors are still looking for a yield pickup," said Christian Lenk, a fixed income strategist at DZ Bank.

Europe stocks up

The report also noted that foreign bond holdings of the region's local currency government bonds held steady in the final three months of 2013 given the region's solid economic outlook and the attractive yield pickup versus other markets.

East Asia's bond markets need to be prepared for increasing risks - ADB

Notice also that the client is earning 30 points more than the current AA rate, a yield pickup made possible by linking two parties whose assets have different returns.

Interest rate swaps that benefit both parties

Our net interest margin increased to 3.58 percent for the quarter, which is the result of continued loan yield pickup from recent rate increases combined with our stable core deposit base.

BancorpSouth reports Q3 EPS 43c, consensus 43c

Much of the investment is based on 'yield pickup' - the additional interest rate an investor receives when selling a lower-yielding bond in exchange for a higher yielding bond - which could reverse if we start seeing higher and more attractive rates in the US," said Jakobsen.

Investors need to prepare for a US recession followed by a global slump in 2017

"Emerging market equities are cheaper than developed market according to various metrics and emerging market bonds offer a substantial yield pickup; both should be further boosted by the plentiful global liquidity and the outlook for a milder tightening cycle in the US," Dugan said.