Something Just Snapped At The Comex (Zero Hedge), page-94

Dandoff makes questions, but cannot read the answers due of some form of aphasia, a problem aflicting most goldbugs. So  I am posting this only for the benefit of the  newbies or the undiceded.

Who Invests in High-Yield Bonds?

A variety of investors participate in the high-yield bond market. They include individuals who invest in high-yield bonds through direct ownership and/or through mutual funds; insurance companies; pension funds and other institutions.

Individual investors purchase individual high-yield bonds, often as part of a well-diversified investment portfolio. They also participate in this market through high-yield bond mutual funds.

Mutual funds pool the assets of investors to create portfolios of high-yield bonds. Three separate categories of mutual funds invest in high-yield bonds:

High-yield funds invest primarily in lower-rated bonds.

Income mutual funds invest in a broad mix of income-producing securities, including high-yield bonds, investment-grade bonds, preferred stocks and high-dividend stocks. High-yield bonds usually represent a small portion of their holdings.

Corporate bond funds invest mainly in investment-grade corporate issues, with a smaller allocation to high-yield bonds.

Insurance companies invest their own capital in high-yield bonds. They also participate in the market through “separate accounts” offered in variable insurance and annuity products.

Pension funds invest in high-yield bonds to earn higher rates of return than those available from investment-grade bonds, or as an alternative to investing in an issuer’s stock. Pension fund trustees are fiduciaries that must invest within “prudent man” guidelines and other considerations, which vary from state to state. Recently, in some cases, these guidelines have allowed increased pension fund participation in high-yield bonds.

Collateralized bond obligations (CBOs) are debt instruments that offer many benefits of investment-grade
bonds, including current income and a high quality rating. The collateral behind these bonds often consists of a pool of high-yield bonds diversified by issuers and industries, which enables the pool to obtain a higher rating than any individual bond in the pool. CBOs may include several “tiers,” which offer different maturities, or levels of risk.

Do you see banks listed there?

- See more at: http://www.investinginbonds.com/learnmore.asp?catid=5&subcatid=19&id=196#sthash.2mWePbtI.dpuf