NEW YORK (Reuters) – The gains in high-yield junk bonds are not over, thanks to the Federal Reserve’s supportive stance on monetary policy, Margaret Patel, one of the mutual-fund industry’s longest tenured and most well-known bond managers, said on Tuesday.
“The risk-taker will be rewarded,” Patel, a senior portfolio manager at Wells Fargo Asset Management, said at the New York headquarters of Reuters. The ICE Merrill Lynch U.S. high-yield index has posted returns of 8.92% so far this year. Patel’s Wells Fargo High Yield Bond fund is up 8.68% for the same period.
Drift - Yields - Junk - Bonds
“I see a downward drift in yields in junk bonds,” she said.
Patel, who has more than 40 years’ experience in the business, said the Fed will not be cutting off liquidity and could, in fact, slash interest rates this year. The Fed’s potential cuts will trigger another wave of gains and access to credit for high-yield...
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