- Investors, especially retirees in need of income, are flocking to funds with high yields. This should mean more interest rate risk that comes with longer durations normally associated with higher rates.
- With rates low, even for “junk bonds,” the amount of price declines tied to interest rates returning to normal levels increases with duration, thus the concern about long duration funds.
- Based on its short duration, high yield exposure, combined with an economy supportive of growth, I am bullish on BGH.
For further details see:
BGH: Barings Global Short Duration High Yield Fund Seems To Promise A Contradiction