Mirabaud's Lake: Why high yield has caught forecasters by surprise

High yield has caught everyone by surprise this year in two respects.

Firstly, because it has been cast into the shade by anything duration-related, as the pace of recovery in the US has failed to put pressure on the treasury yield curve so far. Secondly, this year is turning out very much like last year, with global high yield already enjoying mid-year total returns of nearly 6%, which investors would have taken for full year 2014 if asked back in December. As such, investors have continued to pour money into fixed income, with the worries of a great rotation into equities a distant memory. Why is this and what did forecasters get so wrong? The coll...