Zemek favours BBB debt

New Star manager feels Top end of investment grade debt too expensive

Theo Zemek, lead fund manager of the soon to be launched New Star Managed Distribution fund and the group's head of fixed income, is favouring the lower end of investment grade debt, believing the top end is currently too expensive. While BBB corporate bonds had a tough time in 2002, Zemek feels they are now cheap and will benefit from increased belt tightening in 2003. She said the top end will get cheaper over time as increased government spending drives further gilt issuance but she would prefer to short this area of the market if her mandate allowed it. 'Now is the time to be taking...