Hermes' Lundie: Emergence of 'haves and have nots' offers 'real value' in HY credit

Hermes' credit team updates investors

Mike Sheen
clock
Fraser Lundie of Hermes Investment Management
Image:

Fraser Lundie of Hermes Investment Management

A flight to quality in credit markets, which has seen investment grade continue to outperform high yield, will lead to an emergence of corporate 'haves and have nots' as companies struggle to obtain sponsorship, but it has created "substantially more attractive valuations" for investors, according to Hermes' head of credit Fraser Lundie.

In an online investor presentation from Federated Hermes' credit team on Friday (3 April), Lundie explained that the "level of idiosyncratic risk" emerging from slightly lower volatility and better liquidity has given investors clearer perspective on which "companies and securities have sponsorship and which do not". High drama in high yield: How Covid-19 and oil crisis double-whammy hit markets He added: "There is now a situation where lower quality companies are lacking sponsorship and underperforming. "We are only at the very beginnings of this, there is an emerging 'haves and h...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Bonds

Market Movers Blog: Fed poised for another historic rate hike later this week

Market Movers Blog: Chinese stocks fall on weak data despite rate cut

Latest news and analysis

Investment Week
clock 15 August 2022 • 1 min read
Josh Mayne, Lowes Financial Management

Structured products in Q2: Positive returns in volatile market

Q2 2022 maturity results

Josh Mayne
clock 09 August 2022 • 2 min read
Four graphs explaining... fixed income

Four graphs explaining... fixed income

Four experts write

Investment Week
clock 08 August 2022 • 3 min read
Trustpilot