Halister News

(Bloomberg) -- While high-yield bonds may continue rally, not time to expand holdings significantly given asset class isn’t out of “the woods yet when it comes to fundamentals,” says Todd Youngberg, global head of credit at Aviva Investors.

• Says in interview in Taipei that U.S. company earnings still weak; sees two Fed rate increases this yr but need more clarity on tightening path before adding to HY holdings
• Expects ECB to cut rates further, expand asset purchases to include investment-grade bonds
• Recommends U.S. consumer bonds amid increased spending on homes and cars
• While valuations of U.S. HY bonds are turning more attractive vs Europe, is still overweight on latter as there’s less commodity exposure and monetary policy is more accommodative
• Still cautious on IG bonds as issuer leverage and supply are rising; sees value in Canadian notes in this space
• NOTE: Bloomberg’s Global HY Corporate Bond Index has rebounded 5.3% from a 3-yr low reached in Jan.