Despite the looming economic slowdown, the severity of which is yet unknown, the High Yield (HY) market presents an attractive investment opportunity.
Most investors are underweight High Yield, we thus want to make an argument for the contrarian view that, beyond supportive short term technicals, the asset class deserves a new assessment.
• Fundamentals are solid
• Refinancing risk will be the key driver of potential defaults
• This risk is well flagged and priced in current High Yield market
• High Yield shows superior rating profile and technicals vs loans or private debt
• Increased concentration in markets calls for a diversified approach to High Yield
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