Ugurtas: High yield has not had its day

Baring High Yield Bond manager expects to benefit from further spread compression in asset class after two years of solid outperformance

High-yield bonds can continue to offer a defensive element to portfolios in a rising interest rate and inflation environment, Barings’ Ece Ugurtas has claimed. Joining from M&G in 2003, she has propelled the group’s High Yield Bond fund to the top of its sector over three years, returning 56.1% compared to the IMA High Yield sector average of 3%. “We expect to benefit from further spread compression, albeit not to the same extent as in recent years,” she said. “Default rates have also fallen sharply and we expect them to continue trending downwards. Meanwhile demand will continue to ...