Read issues default risk warning for high yield bond market

Some parts of the high yield bond market do not have all the default risk priced in, warns Invesco Perpetual's Paul Read.

The co-head of fixed income says we could have seen a far worse default cycle post the Lehman Brothers bankruptcy, but this was supported by emergency actions from governments and central banks. Now, however, he urges investors to make sure they understand whether default risk is priced properly into the bonds they are buying. “There are probably significant parts of the market, particularly high yield, which have been given too much benefit of doubt to the ability to refinance and are not pricing in enough of that risk. Probably, within high yield, for example, you want to be focu...