Bad headlines cannot detract from credit market returns

ON BONDS

F&C's Fatima Luis on why she is positive on high yield but remains selective and focused on high-quality issues.

The market has been characterised of late by perpetual bad headlines: rising inflation, ongoing sovereign debt issues, the possibility of central banks raising interest rates, consistently poor US housing market and the events in Japan and subsequent volatility. These headlines have overall had little effect on the credit markets to date. However, the market remains resistant with many investors upping their cash positions. Markets have all but priced in the expected interest rate rises across the UK and Europe, which are not anticipated to be overtly large and should not be enough to...