The current credit cycle may be reaching a turning point and, notwithstanding fears that US Federal Reserve rate hikes look almost certain, now is the time to buy high yield credit and particularly from Asian issuers, says Teresa Kong, portfolio manager at Matthews Asia.
Corporate bond issuers in Singapore will find it easier and cheaper to tap into the retail market after the country’s monetary authority (MAS) introduced two new regulations that will open up corporate bond offerings to retail investors.
Saudi Arabia is poised to tap the international loan market for the first time to raise $10bn (£7bn, €8.8bn) to help fill a huge budget deficit caused by the dramatic fall in oil prices, and may also issue a debut global bond, according to bankers cited in several media reports.
European investors reduced their high yield bonds holdings by a net €12bn last winter. But the arrival of spring is heralding a change in sentiment.
Worldwide assets in open-ended funds were €36.9trn (£29.2trn, $41.3trn) at the end of 2015, having outperformed every quarter in 2014, according to the European Fund and Asset Management Association (Efama).
Money has poured into high yield bond funds at a rare pace over the past month but is this a sound move based on merit, or a case of return-starved investors clutching at straws?
Investors are fleeing from emerging market debt, and optimism for any recovery in the near term is low, particularly for local currency government bonds.
The British pound is “not the only casualty” of uncertainty resulting from the upcoming referendum on whether to remain or leave the European Union, according to head of credit strategy at BlueBay Asset Management, David Riley.
Fixed income funds saw outflows of £267m in January 2016, the Investment Association said on Monday, which accounted for more than half the total outflows of £463m ($642.5m, €589m) recorded for the month.
State Street Global Advisors (SSGA), the asset management arm of State Street Corp, has launched 11 new fixed income ETFs on the Deutsche Börse Xetra.
Carmignac Patrimoine has shifted its focus to US treasuries and credit opportunities in European financials as the managers maintain their bearish view on equities.
The curent period of volatility in global markets is due to a collision of game changing events for long term investors, argues Sandra Crowl, a member of the investment committee at Carmignac Gestion.
