Searching for value in global high yield

BONDS

Martin Reeves, manager of the Legal & General High Income trust, explains why there is still value to be found in the global high yield market, even in the current environment of record low yields.

Are we seeing a meaningful improvement in developed market economic growth? Do investors want to see it? This second question may seem odd because, of course, it is in everyone’s best long-term interests for there to be a sustainable economic recovery. However, markets have reacted with dismay to positive announcements over the last few months. When Federal Reserve chairman Ben Bernanke started talking about ‘tapering’ the central bank’s asset purchase programme, investors saw this as confirming their fears and markets stuttered painfully. Markets took it as a sign quantitative easing ma...