High yield prices may be poised for a boost
Robert Vanden Assem, CFA
Head of Investment Grade Fixed Income and Chairman of Fixed Income Asset Allocation Team
Solid economic data, an upturn in year-over-year earnings comparisons, and substantial fund flows into mutual funds and exchange-traded funds (ETFs) are likely to continue to support high yield bond prices. Meanwhile, within securitized products, uncertainty about the end of Federal Reserve reinvestments could increasingly weigh on investors’ minds in the coming months. We are therefore increasing our high yield allocation to 40% from 35% and decreasing our securitized products allocation to 20% from 25%. We maintain allocations of 30% to investment grade credit and 10% to emerging markets debt.
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