T. Rowe Price's Orchard remains cautious on US high yield despite recent strong performance

European high yield attractive

Ken Orchard, co-manager of the $114m T. Rowe Price Diversified Income Bond fund, has said he is "not convinced" this is the time to be adding to US high yield despite strong technical factors and the rising oil price supporting the asset class.

Orchard (pictured) said he doesn't expect US high yield spreads to tighten from here against US Treasury yields as valuations compared to other fixed income asset classes appear expensive. US high yield has delivered strong returns over the past year with the S&P US High Yield Corporate Bond index rising 3.4% versus the 0.9% decline in the S&P US Treasury Bond index. The manager said the strong performance had been helped by tailwinds such as US President Donald Trump's tax reforms and rising oil prices. Could we see the return of $100 oil prices this year? Oil prices have soare...