David Ennett, co-manager of the Artemis Global High Yield Bond fund explains why the sector has now matured giving investors greater scope to invest in higher quality bonds in this portion of the market. He emphasises the importance of actively choosing which segments of the market to invest in and explains why high yield bonds are appealing in an inflationary environment.

The interview also delves into the fund's investment approach, including its preference for BB and B-rated securities, as well as its focus on developed markets like the UK and the US. David also shares the rationale behind a few unique holdings, such as Crocs, and why they make a better investment than fashion choice. Regarding the market outlook, David believes the second half of the year may continue to be influenced by inflation and uncertainty, but there's growing acceptance that the downside may not be as pronounced as feared. David also discusses his 3-5 year outlook for the high yield bond market.

What’s covered in this episode: 

• What type of companies make up the high yield market
• Does high yield become risker in an inflationary environment
• Where does the Artemis Global High Yield Bond fund invest
• Why the UK bond market is so appealing
• The investment case for Crocs
• Uncovering hidden gems in the market
• How do high yield bond funds fit in a wider portfolio
• The correlation between equities and high yield bonds
• Moving on from inflation denial and what that means for the second half of 2023
• The medium-term outlook for high yield bonds

More about the fund:
The Artemis Global High Yield Bond fund is a high conviction fixed income portfolio investing in 60-100 high yield issuers across the globe. Managers David Ennett and Jack Holmes, aim to make the money invested by shareholders grow in two ways: by earning regular income and by increasing the overall value of the investments. They do this by looking for opportunities in parts of the bond market that other investors don't pay as much attention to.

Learn more on fundcalibre.com

Please remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.

Learn more on fundcalibre.com

Please remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.