Ben Pakenham, manager of the Aberdeen High Yield Bond fund, takes a closer look behind the headlines at what is happening in the high yield bond sector.
Central banks have implemented unprecedented easing policies since the onset of the 2008 financial crisis with the aim of spurring economic growth and boosting risk appetite. The influx of cheap capital has lowered investment grade bond yields to below 3% and forced investors to look further afield for higher yielding assets to meet investment objectives. High yield has been a popular choice, with 2012 investor inflows into US high yield and European high yield reaching US$23bn and €8bn, respectively. The strong technical backdrop has continued in 2013, marked by record weekly flows i...
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