Eric Gold and Jim Farrell, Managing Directors at Mackay Shields weigh in on the state of high yield, November’s pending U.S. election uncertainty, and the importance of incorporating resiliency into your portfolio.
Since March 2020’s aggressively widening credit spreads and overall market volatility, investors have enjoyed a somewhat speedy recovery from what looked to be a deep bear market. Gold says the Fed’s unprecedented level of support and aid is a huge factor in the market rebound. While leisure and retail sectors continue to struggle, tech-forward sectors benefiting from the emerging work from home economy are clear winners. Gold also speaks to the changing high yield landscape and opportunity in its corresponding credit dislocation. Looking ahead, Gold predicts that the credit spread could very well tighten as a reflection of improving index quality, and suggests that the biggest opportunity for investors is ‘clipping the coupon’ and collecting yield.
The high yield fixed income team at Mackay Shields, a New York Life Investments Company, brings deep industry expertise to the table. Striving to maximize income and long-term capital appreciation, the highly tenured investment team leverages a bottom-up, value oriented investment approach.