Gearing up for greater volatility and rising defaults in high yields

High Yield

This week's Conjecture panel discuss the dynamics of supply and demand in the high yield market

Defaults may be on the rise once again but not in the same fashion as seen following the crash of the technology market in mid 2000. Manager of Hendersons' retail bond funds, John Pattullo and Newton's high yield manager Paul Brain both note it is the dynamics of supply and demand in the high yield market that will lead to greater short term volatility in the asset class rather than an increase in defaults. Lower quality businesses are issuing, while a greater number of hedge funds are entering this market to play on spreads. Would you advise your own family to buy high yield right now? J...