high yield

'How we handled the European sell-off'

The high yield bond sector saw its worst third quarter for three years, but the sharp falls are a good entry point for investors, according to Legg Mason affiliate Western Asset.

Diverging fortunes for government bonds and credit in recent weeks have prompted some fund buyers to suggest strategic bond portfolios could flourish again in the coming months.

'Weak high yield credits are getting weaker'

The credit cycle is in the expansionary phase - typically when companies dabble in a little more financial engineering. Credit risk must return to top priority, argues Matt Eagan from Loomis Sayles.

The recent sell-off in high yield means opportunities in the 'rising stars', housing, and building materials sectors, explains PIMCO's deputy CIO Mark Kiesel.

The collapse of Phones 4u has acted as a ‘wake-up call' for high yield bond investors, impacting prices just as indices begin to recover from the summer sell-off.

Fidelity Worldwide Investment has overhauled the remit of Peter Khan and Ian Spreadbury's Global High Yield fund in order to diversify away from the US and increase exposure to emerging markets.

High yield investors are not being adequately compensated for liquidity risk, argues David Vickers from Russell Investments.

Inflows to European loans have never been stronger, but some investors have been deterred by loose credit standards and terms skewed in the issuer's favour. Lyxor Asset Management UK's Thierry de Vergnes investigates the pros and cons.