Ugurtas: Where next for high yield bonds?

ON BONDS

Ece Ugurtas, manager of the Baring High Yield Bond fund, gives her outlook for default rates and valuations within high yield.

The choices for fixed income investors seeking income in today’s markets remain relatively scarce. Yields in ‘safe haven’ government bond markets such as the US are near record lows and there are indication that this environment will persist as global central banks remain committed to underwriting an economic recovery through accommodative ‘pro-growth’ monetary policies. An alternative to government bonds for investors willing to take on more risk within a well-diversified investment portfolio is higher yielding fixed income assets such as high yield bonds and emerging market debt. Wh...