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What is Bond Market Liquidity and Stress Tests about?

Third Avenue Management halted redemptions from its Focused Credit Fund due to large investor redemptions and illiquidity in the bond markets. The fund held mostly risky CCC-rated bonds and prices declined significantly. Halting redemptions allows Third Avenue to sell bonds over time rather than dumping them. This highlights liquidity risks when bond funds offer daily liquidity while holding illiquid assets.

Author

Anonymous aODoCdVCW

Language

EN