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Geneva fund selectors choose high yield

While high yield bond is rather unloved across Europe, it has a lot of buyers in Geneva. But they don’t increase their exposure because they love to…


alt=''Some 42% of interviewees said they will increase their weighting, more than three times the Pan-European reading, while only 25% said they will decrease their exposure or are not using the asset class. 

The least unloved

But statistics do not always tell the whole story, as it turned out that most fund buyers who favour the asset class do not do so because they love it. They told our researcher that they are either underweight after they sold much of their positions last year, or they see high yield as only slightly less unattractive than other bond classes. For example, our researcher couldn’t find any buyers of investment grade bonds at all in the whole of Geneva.

Graph: high yield bond sentiment


Emerging market debt is the only other bond asset class some of Geneva’s fund selectors are increasing their weightings in. A quarter of interviewees say they will step up their allocation to both government and corporate emerging market bonds. Exactly the same number of people plan to scale down their weightings, while 8% do not use either of the two emerging market bond categories, slightly below the Pan-European average.