Ten years of booming growth pushed global assets under management in high yield bond ETFs past $51bn (€42.6bn) in 2016, but are the apparent diversification benefits everything they’re cracked up to be?
The improving economic outlook in the euro area has prompted the European Central Bank to consider reining in its monetary stimulus. How should investors respond to the prospect of monetary tightening in Europe?
Every quarter, Expert Investor asks European fund buyers how they intend to change their allocations. Click through the slides below to see which asset classes investors change their views about most frequently.
European equity funds again top investors’ wish lists. Appetite for US equities, however, has vanished as quickly as it surfaced in the wake of Trump’s election victory. Demand for high-yield bonds also declining.
Ricardo Libano, a fund selector at the Portuguese wealth manager IM Gestão de Ativos in Lisbon, has a natural inclination to invest in active funds. But it’s not always easy to do so, and sometimes he is left little choice but to select a passive option.
US and UK corporate bonds were in great demand among European investors in March while high-yield bond funds saw outflows, according to Morningstar fund flows data.
Investors in Finland have increased their allocations to emerging market debt and high-yield bonds in an effort to maintain yields. Though spreads have compressed below their long-term average, they feel forced to maintain, or even increase their allocations.
2016 saw some highly successful launches of fixed maturity bond funds as investors took the opportunity to lock in attractive yields combined with reduced duration risk. But are such products still worth buying now, with credit spreads having sunk below their long-time average?
Axa Investment Managers has launched another fixed term bond fund that invests primarily in European corporate high yield debt securities.
Investors are stepping up their allocation to high-yield bonds and emerging market debt. The pair were the two best-selling asset classes in January, according to Morningstar fund flows data.
As inflation is rising and interest rates seem to have bottomed, investors are reducing the duration of their bond portfolios. But is duration risk really a factor in all fixed income asset classes?
While emerging market debt saw record quarterly inflows globally during the third quarter of 2016, the global hunt for yield does not benefit developed market junk bonds. But this could soon change.
