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Rating:High-Yield PMs Rejigger Their Portfolios but Still Avoid the Riskiest Bets Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, October 14, 2011

High-Yield PMs Rejigger Their Portfolios but Still Avoid the Riskiest Bets

News summary by MFWire's editors

Some high-yield bond-fund PMs are making a break from the risky asset class and looking elsewhere for returns after a two-year bull run, the Wall Street Journal reports.

"We like junk bonds a lot more today than six months ago, but we are not ready to buy them yet," said Jeffrey Gundlach, head of DoubleLine Capital LP[see profile], at a recent meeting, adding these companies are likely to start defaulting in 2012 when their debt comes due.

Specifically, some fund firms such as BlackRock Inc.[see profile] are reportedly betting on less risky assets such as corporate debt in Europe or emerging markets, commercial mortgage-backed securities and convertible bonds.

"While there's tremendous amount of uncertainty, good opportunities are starting to present themselves," Jim Keenan, head of leveraged finance portfolios and investments at BlackRock Inc., told the pub.

Other high-yield PMs such as Julianne Bass, who manages $1.6 billion of high-yield assets for USAA[see profile], are also reportedly betting on mortgage-backed securities. 

Edited by: Hung Tran

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