Given the lack of yield available, one area within fixed income where we’ve seen significant outflows in the past couple of years is sterling high yield.
Despite rising yields at the start of the year driving optimism among managers within the sector that their fortunes were on the turn, proclamations that 2023 was set to be the ‘year of the bond’ has yet to trigger large inflows.
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According to the Investment Association, just £71.5m has been invested into the IA Sterling High Yield sector over the year to June versus net inflows of £1.3bn into UK gilts.
So are investors right to remain cautious, or do they risk missing out? In this month’s head to head, Mike Della Vedova, portfolio manager of the T Rowe Price Global High Yield Opportunities Bond Fund, argues that yields remain compelling despite the volatility, while Chris Metcalfe, chief investment officer at Iboss, prefers to use strategic bonds to gain access to the asset class.
Read Mike Della Vedova and Chris Metcalfe’s responses in September’s Portfolio Adviser
