As recently as April, high yield bonds registered the strongest net inflows since July 2013, the month after the taper tantrum sell-off. But fortunes for the asset class reversed sharply in May, according to Morningstar’s latest fund flows figures.
Retail investors expect their investments to produce an income far beyond what they can reasonably hope for, according to the annual Schroders Global Investor Study.
Bond ETFs remained popular with investors globally last month while outflows from equity trackers continued apace. According to data from Blackrock, European investors poured $2.6bn (€2.3bn) into fixed income ETFs in May.
New research by Morningstar challenges assumptions about the threat ETFs pose to the stability of high yield markets, especially during times of crisis.
The global high-yield default rate will rise to reach 5% in November this year, according to Moody’s Investors Service forecasts.
In this video interview, Franklin Templeton’s head of European fixed income David Zahn explains how he sees great opportunities to make money from the Brexit referendum and the ensuing volatility. He also outlines why he thinks the dollar will resume its upward path.
Amid the political turmoil, Brazil has done well for fixed income investors, but questions remain around further volatility.
European investors have been pouring unprecedented amounts of money into fixed income ETFs this year, while they are taking money out of equity ETFs, according to data from Blackrock.
With the eurozone currently experiencing deflation, inflation-linked bonds are probably not the first thing on the mind of investors. However, as Brent crude is now back at $48, the only way for inflation is probably up. So should investors start thinking about protecting their portfolios against price rises?
The Robeco Global Total Return Bond fund (formerly known as Robeco Rorento) combines the two most important qualities Alvaro Martín Sauto, head of funds-of-funds at Bankia, looks for in a fixed income fund: it can allocate flexibly to various asset classes, but prioritises limiting drawdowns over maximising returns.
Corporate bond funds are strongly back in fashion after a long streak of outflows, as investor confidence inched up in March and the ECB announced the inclusion of corporate bonds in its QE programme. Emerging market debt even witnessed the biggest net monthly inflows in more than two years, according to Morningstar’s latest fund flows…
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.
