Outlook for High Yield

As we go into 2018, we assess the prospects for High Yield.

26 Jan 2018

With a relatively benign macro-economic backdrop, and an environment of gradually rising interest rates, we believe the outlook for High Yield is favourable.

Given the strong global outlook and an increasingly well capitalized banking system in the US and Europe, together with continuing high levels of corporate debt refinancing, we do not foresee any significant deterioration of credit in 2018.

Overall, we regard High Yield as fairly valued and expect returns over the next twelve months to be driven largely by coupon and carry.

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