High yield investing in the post-Lehman era

HIGH YIELD

M&G Investments' high yield bond fund manager James Tomlins examines how investing in the asset class has changed since the crisis.

The effects of the financial crisis, which began as early as 2007, are continuing to have an impact on financial markets. It is our view that central banks will keep interest rates lower for longer, as they attempt to reduce unemployment and stimulate economic growth. The 'central bank regime change' from a focus on an inflation target to unemployment is well underway, and will continue to influence the trajectory of interest rates on all fixed income asset classes for the foreseeable future. The combination of this central bank regime change with a rapidly ageing population in the de...