German DAX vs. CoCo Bonds: Tracking One to Forecast the Other
by Editorial Staff
Updated: May 10, 2021
Risky assets always rise during stock market rallies. When investors en masse feel confident about the future, they buy just about everything -- even investments with the word "junk" right in the name. (Looking at you, junk bonds.)
Contingent convertible bonds -- or CoCos -- are not "junk" bonds per se, but they are definitely riskier than, say, U.S. Treasuries. Interestingly, CoCos have a strong correlation with the broad stock market.
Watch our Global Market Perspective contributor Brian Whitmer explain more as he shows you the European equivalent of the DJIA, Germany's DAX stock index.
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