Corporate bond market participants have struggled with the issue of liquidity for some time and the decline of broker-dealer balance sheets since the 2008 financial crisis has not helped. Outside of cash bond indexes, investors, money managers, asset allocators, and traders look at other tools to monitor broad movements in the corporate bond market:
• CDS Indexes. In particular, the CDX Investment Grade and CDX High Yield Index
• ETFs. In particular, the iShares and State Street Global Advisors investment-grade and high-yield indexes
As you can probably tell by this part of the book, the reality is that the majority of the corporate ...