Demand increases for high yield but supply is limited

Higher yielding sterling bonds in the UK make up less than 1% of the total sterling bond market, acc...

Higher yielding sterling bonds in the UK make up less than 1% of the total sterling bond market, according to Stephen Snowden, manager of the Aegon UK Extra Income fund. He says the fact that there are only about 30 companies issuing high yield bonds makes it difficult to build a sustainable portfolio that does not invest in overseas or convertible paper, both of which he feels bring equity volatility into a fund. Snowden adds that many funds claiming to be UK bond portfolios rely on overseas, even emerging market bonds. Even so pension funds have been able to take advantage ...