Milburn: High yield market will suffer 'bout of indigestion'

The high yield bond market is set to "suffer a bout of indigestion", according to Phil Milburn, manager of the Kames High Yield Bond fund.

The flow of money into high yield debt has continued apace at the start of this year, with some investors turning more cautious as yields hit record lows. However, Milburn (pictured) said the expected "indigestion" in the market will only occur once investors' cash balances have been "whittled down to a level that creates discomfort". "Nowadays the investment banking trading community has so little of its balance sheet committed to trading bonds that there is only a minimal buffer for when the market turns in either direction," he said. Supply is "yet to satiate seemingly overwhelm...