"The market is simply letting its guard down at the expense of getting some incremental yield," said Sandy Rufenacht, chief investment officer of $1.3 billion high-yield asset manager Three Peaks Capital.
Four of the managers eventually closed shop because they could not attract enough outside investors, and seven remain operational, including a fund that invests in high-yield asset-backed securities and one that provides loans to agricultural commodity producers and companies.
In fact, EM debt assets outperformed U.S. high-yield assets during the August 2007 subprime crisis.
Thus, in terms of attracting lenders, a new player will have to compete not only with the existing large platforms, which have already earned their reputation, but also with other high-risk, high-yield assets.
Smaller regional banks that actually hold the majority of deposits in America have not had access to these high-yield assets, as they do not have the infrastructure to underwrite these loans on their own.
The era of cheap or zero-interest money that led to a wall of liquidity chasing high yields and assets – equities, bonds, currencies, and commodities – in emerging markets is drawing to a close.
So, is it fair to say that the rally in junk bonds is over? A. High yield is still an asset class where you can hit a single, especially compared with alternative, interest-bearing investments.
A star performer is Columbia High Yield, a tiny ($82 million in assets) junk fund that is up 4percentthis yearar while Lipper Inc. reports the average junk fund has lost 8.9percentt.
historically "riskless" assets with high yield and low VAR.
She works in New York as a director and portfolio manager in a high-yield bond asset management unit of Nomura Holdings, the Tokyo brokerage firm.
High-yield equity (high yield and total return exceeds yield) Lilliput (less than $25 million in assets and return beats S&P 500).
