This was part of a Nomura investor day, with an introduction to a range of funds and strategies. With fixed income returns being squeezed for those investors seeking returns from fixed income they need to go up the risk scale. The challenge with High Yield is that it behaves like equities, and against the Vanguard Global Bond, over the last three years it has only marginally outperformed, but longer term the performance gap is wider.
If you consider the volatility, this is closer to global equities at 10.44% compared to 3.03% with the Vanguard Strategy for a marginally better return over three years. It is also worth looking at the downside capture which indicates the fund falls further than the market and captures slightly above the market. The batting average also appears poor at just below 50….read more