Hedging High Yield and Emerging Market Bond Tail Risk With VIX® Futures (S&P Dow Jones Indices, 2017)
High yield corporate bonds and emerging market U.S. dollar-denominated bonds are both credit-focused fixed income sectors. Lack of liquidity at times for both sectors can make hedging bond portfolios a challenge. Traditionally, an index-based credit default swap (e.g., CDX, iTraxx) can be used to hedge credit exposure. However, during periods of market ...
