Managers expect 'once in a lifetime' returns from high yield despite market carnage

Topping up exposure on weakness

Bond managers and fund buyers remain positive on high yield, despite recent turmoil in the asset class, and have been adding to their positions on weakness.

US high yield bonds has been pumelled as concerns over defaults in the energy sector following fresh oil price falls to seven-year lows, jitters over impending interest rate rises and liquidity fears prompted a rush for the exit. The situation was exacerbated last week when US firm Third Avenue Management imposed a freeze on withdrawals from its $788m high yield bond fund, sparking fears over an industry-wide liquidity squeeze. On Monday, two of the biggest high yield bond ETFs, the SPDR Barclays High Yield Bond and the iShares iBoxx $ High Yield Corporate Bond, fell to their lowest p...