Fund managers are generally negative on high-yield bonds for next year, despite optimism of economic...
Fund managers are generally negative on high-yield bonds for next year, despite optimism of economic prospects pushing the market higher in recent months.
According to research on the high income sector by Standard & Poor's, managers generally found the three months to the end of October challenging, confirmed by some significant performance disparities in certain currency sub-sectors over such a short period.
The most common reason for underperformance was substantial exposure to investment grade bonds. In the face of the recent testing background, the analyst said a common theme among managers has been the reduction of risk both in terms of exposure to interest rate sensitivity and to credit. This has seen many funds reducing exposure to higher risk areas of the fixed income spectrum, such as high-yield and emerging market debt.