View more on these topics

Jupiter says high-yield bond market is peaking

Jupiter corporate bond fund manager John Hamilton thinks the high-yield bond market is peaking.

Following last week’s sell-off of high-yield bond markets in response to a profit-warning by General Motors, Hamilton thinks the spread between high-yield bonds and government bonds is still too narrow and prices are set to fall further.

He says prices for corporate bonds, especially at the bottom end of the junk market, have gone up so far that the effective yield no longer adequately compensates for the additional risk of investing. The spread on junk bonds has widened from 4.2 per cent on February 16 to 5 per cent on March 21 but Hamilton believes the spread should be 10-15 per cent for high yield bonds to look fair value.

Hamilton says: “Demand for corporate bonds has increased significantly over the past couple of years but prices have gone up so far that the yield investors can earn at this end of the market is at an insufficient prem-ium to that being offered on gilts. This is not sustainable.”


Survey shows public-private DB divide

More than twice as many public sector workers have access to final-salary pension schemes than people in the private sector, according to research from the Chartered Institute of Personnel and Development.

Levy mettle

At the beginning of this year, I started a series of articles reviewing the progress of certain key pension issues and highlighting opportunities for pension advisers to assist corporate and personal clients.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm