Obligations à haut rendement

Strong performance across markets in January has left some investors feeling they’ve missed out on the rally in bonds. No need to worry, says Felipe Villarroel.

With projections for European growth and inflation being hastily revised in early 2023, the region’s bonds are still paying investors a premium that may not be around for long, says Dillon Lancaster.

Looking back to previous cycles in the high yield market, data have shown down periods have usually given way to strong returns years. While spreads are set to stay volatile until inflation starts to slow down, Portfolio Manager Stella Ma sees valuations becoming more attractive as we near the end of 2022.

With some UK bank bonds now trading with higher yields than their counterparts in Turkey, Mark Holman questions whether the dumping of UK and sterling assets has gone too far.

With Europe facing an energy crisis and the UK bracing for a five-quarter recession, a strong allocation bias to the US seems a no-brainer. However, George Curtis says that when looking at relative value in fixed income, the decision is never that simple.

Pierre Beniguel explains why high yield issuers are selling new bonds at steep discounts to par value, and why this represents an opportunity to build potentially significant performance into fixed income portfolios going forward.

US banks remain bullish about the health of the consumer, but credit spreads are still pricing in not only a recession, but a fairly severe one. Are the banks wrong? Or have credit markets just backed up too far on negative fund flows?

With Heimstaden showing its commitment to corporate hybrids with a €600m tender offer, Pierre Beniguel looks at the complex decision issuers have to make and says more could follow suit with bonds trading at steep discounts.

After H1 2022 broke market records for all the wrong reasons, Gary Kirk says fixed income outflows could reverse quickly if investors see evidence that central banks are turning the tide on inflation.

The US high yield market has experienced the third lightest month in terms of new issue flows since the Global Financial Crisis. Chris Holman explains what this means for default rates going into the second half of the year.

For all of these observations, there is one common observation – yields did not stay at these high levels for very long.

With investors having endured a painful period of rising yields in 2022, Mark Holman looks at whether rates weakness or credit spread widening has been most to blame.