Dan Roberts, manager of the Nordea 1 – Unconstrained Bond fund, notes: “We have a large allocation to high yield in the portfolio currently. We also bought into hard currency emerging market credit at attractive spread levels, as our longer-term view is that select corporates in emerging economies will weather the current period of volatility, while a longer-term systemic crisis in the sector is not on the horizon.”
Closer to home, Mike Della Vedova, manager of the T. Rowe Price European High Yield Bond fund, suggests that within European high yield, default rates are expected to fall further this year, which combined with a burgeoning economic recovery, will help issuers on a fundamental basis. He adds: “The ability of the European Central Bank to remain accommodative for the foreseeable future will also be supportive for European high-yield securities, with higher coupons often reducing duration risk while at the same time offering attractive income in a low-yield environment.”
Nyree Stewart is features editor at Investment Adviser
