Where are the best credit opportunities following the sell-off?

Where are the best credit opportunities following the sell-off?

Stephen Walker, head of equities and market strategy at Ashcourt Rowan, explains why, on a risk-adjusted basis, high yield bonds and loans are still a good option for investors, despite the threat of an interest rate rise.

Recent weeks have witnessed something of a disturbance to the pattern of low volatility that has been seen for some time now. It is similar to the summer of 2011, although quite different from the short-lived ‘taper tantrum’, which was seen in May and June 2013. During the taper tantrum there was a simultaneous sell-off in both equity and bond markets, as investors panicked about the end of quantitative easing, and a rise in interest rates. At the time, our view was that interest rates would not rise anytime soon, so this reaction was unwarranted. By contrast, this latest sell-off has...