- "Index levels point to a yield of 5% to 7% for the asset class and as active investors we hope to add around 200 bp to this levels"
High yield strategies had a great year in 2012. Michel Ho, Client Portfolio Manager for High Yield in ING IM gives a hint of what happened in the fourth quarter of last year and which are the main drivers for the asset class in 2013.
“It all started in December 2011, attracting a lot of investors to this asset class in 2012”, he explains in a recorded interview in ING WebTV. “Supportive monetary policies by European Central Banks and the FED translated in a lower probability of tail risks, the low rate of defaults and general appetite by investors searching for yield were supportive for this asset class in 2012.”
With the strong flows, at the end of December of 2012 cash levels were slightly high, and ING IM has been very active in the new issue market at the beginning of 2013. In terms of strategy positioning ING IM remains slightly above risk in general, overweighed in Asia, holding a slight underweighted position in Europe, but overweighting risk, and with a neutral stance in the US market.
Asked about expected returns for the asset class and the strategy in 2013, Michel Ho explains: “it’s difficult to say where we’ll be. We expect interesting returns as credit fundamentals are strong, defaults remain low and search for yield is still high, so we see continued inflows in the asset class. Index levels point to a yield of 5% to 7% for the asset class and as active investors we hope to add around 200 bp to this levels”.