Gartside: High yield could return 7%-10% this year

J.P. Morgan's Nick Gartside is preparing to add to high-yield bonds if the asset class sees a short-term correction, in the expectation it could return 7%-10% this year.

The manager of the £135m J.P. Morgan Strategic Bond fund, who runs $1bn across three fixed income strategies, has taken his weighting in high yield down from 40% to 30% in recent months on macro uncertainty. “The return from high yield globally this year will be 7%-10%,” he said. “About 17 emerging market central banks have raised rates this year and there will be an impact from that,” Gartside said. “High yield has already returned 6% this year, and markets do not move in a straight line. This gives us the facility to add to high yield if there is a retracement. As well as a 30% ...