Hermes' Lundie favours 'the higher end of high yield' on Unconstrained Credit fund

Taking subordination risk in investment grade companies

Hermes' head of credit Fraser Lundie said the £359.3m Unconstrained Credit fund has had a "natural bias" to investment grade and "the higher end of high yield" this year.

Lundie, who co-manages the fund with Andrew Jackson, said they had positioned the fund away from developed market low-quality high yield. Hermes boosts global credit team with EMD hire from Jupiter "We have been very concerned with the lowest end of the credit quality of the spectrum we look at - so the low end of the high-yield market - both in the US and Europe," he said. "That has obviously had a very tough time this year on a relative basis because a lot of the short-term things that were propping up that segment of the market have now gone away. "[US President Donald] Trump...