Fallen Angels - From Sin to Win

Fixed income investors have been roaming the yield-deprived earth looking for returns; many hoping that COVID-19 state spending would push up interest rates. With euro sovereign yields, basically, at where we left off at the end of 2019, and with the U.S. Treasury having given up more than 100 basis points, investors may be frustrated. High yield bonds, however, form a notable exception. With spreads having spiked by 2.75%2 since the end of last year, it is an asset class worth considering for some. Whilst we acknowledge that it is not an asset class suitable for every investor; with central banks leading the way we believe that the emerging sub-category, “fallen angels” should be one to take seriously.