To Keep Bad Spirits At Bay, Avoid CCC Corporates

Investors attempting to hide from rising rates by choosing investments with significant amounts of CCC-rated corporate bonds could be whistling in the dark—and exposing themselves to a more ominous kind of risk.

As the US Federal Reserve makes plans to raise interest rates, many investors fear the fallout on their fixed-income portfolios. But trying to avoid interest-rate risk by investing in funds with an abundance of CCC-rated corporate bonds—the riskiest part of the high-yield bond market—may not be a sensible alternative.