“We take a well-diversified approach (to bond investing) on a global basis,” he said Monday. “Our strategy involves investing in a wide range of asset classes--high yield, emerging market, non-dollar and U.S. investment grade. We acknowledge the fact that there has been a great deal of global liquidity and that has benefited spreads. Nevertheless, within the high-yield sector, we find it a much more attractive sector than it was perhaps seven years ago. It much more diversified, it’s populated by much higher cap names and it’s not beholden to the telecom sector as it was seven years ago.”
His allocation includes one-third each in investment grade, high-yield and overseas/emerging market bonds. He said rising yields make emerging markets more attractive.
“High yield had performed relatively well in emerging markets so we thought it was time to make a tactical shift to that sector,” he said.