Why this strategic bond fund launched with 70% high yield

Nordea's recently launched strategic bond fund has a 70% allocation to high yield bonds in a bid to emphasise credit exposure and minimise interest rate risk.

The fund, Nordea 1 – Unconstrained Bond, launched in the fourth quarter of last year and is managed by New York-based fixed income specialist MacKay Shields, which has been running the same unconstrained strategy since 2010. At the end of December, the managers had nearly 60% of the new fund in traditional high yield credit and 12% in emerging market corporate credit. Dan Roberts (pictured), head of global fixed income at MacKay Shields, remains bullish on high yield bonds, despite some investors worrying about the risk of a sell-off later in the year, as he said the corporate issuer ...