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The Risk/Return Outlook In The Medium Term Isn’t Great For High-Yield

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Rupert Hargreaves
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High-Yield

Guest post from Jonathan Rochford, CFA Portfolio Manager Narrow Road Capital Pty Ltd

The Risk/Return Outlook In The Medium Term Isn’t Great For High-Yield

US high yield debt is now back on the bad side of valuations. The credit spread for high yield bonds peaked at 8.87% in February 2016 but is now a miserly 3.96%. The junkiest bonds, those rated CCC and below, are particularly overpriced with little room for upside. One of the forgotten rules at this point of the cycle is that you don’t have to have defaults to...

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Rupert Hargreaves

Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for Hedge Fund Alpha

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