skip to global search (press enter).

skip to funds type (press enter).

skip to footer (press enter).

We are using cookies to give you the best experience on our site. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. By continuing to use our website without changing the settings, you are agreeing to our use of cookies. Find out more here.

Find out more here.

High yield credit to remain in the sweet spot

With low default levels expected in 2021, high yield credit offers investors the chance for potentially attractive yields without the backlash.

“Concerns regarding the reflation trade are certainly valid for fixed income investors, but we don’t consider reflation a significant threat to high yield credit.”

Following a lot of speculation around the potential for an uptick in corporate defaults in 2021, levels are expected to be around the five-year medium in 2021. This provides a degree of comfort to credit investors, who can turn their attention to the search for yield.

Financial repression through extensive central bank quantitative easing has meant that USD18 trillion of debt is now negative yielding.

This low yield landscape and further expectations of higher rates are forcing allocation adaptation. With investment-grade assets trading at the lowest yields in years, we’re seeing significant willingness to extend credit to high yield companies in pursuit of yields in excess of 4%.

To read more on the high yield investment opportunity, download the full article.

“Asset allocators face a tough challenge in 2021 and, in our view, high-yielding shorter-duration assets look set to provide key portfolio solutions.”