Positive outlook for high-yield bonds

Fund manager's comment

While equity markets anticipated the US-led global economic recovery last March, bond markets, confu...

While equity markets anticipated the US-led global economic recovery last March, bond markets, confused by the Federal Reserve's fixation on deflation, were slower to react: yields sank to their lowest levels in 50 years in June. Although yields shot up in July, investors soon questioned whether they had not become too enthusiastic, particularly since the US labour market remained sluggish and consumer spending could falter once the benefits of tax cuts, social security benefits and mortgage refinancing faded. These fears subsided, however, as data improved, not only in the US but in Japa...