The Big Question: Could normalising monetary policy spell the end for fixed income?

Dan Roberts, manager of the Nordea 1 - North American All Cap fund   Still positive for high yield With the broad US high yield market currently trading at a spread to treasuries of about +370bp, our base case anticipates continued tightening going forward. In this scenario, we would also expect some modest increase in interest rates. Our expectations in this regard are shaped in part by an examination of prior cycles, most notably the prior cycle ending in 2008. In that cycle, the Fed first raised rates in June 2004, when the spread on the high yield market was +410. The final...