Skip to main content
Advertising

Originally published Saturday, August 30, 2014 at 8:07 PM

  • Share:
             
  • Comments
  • Print

Investors in junk bonds see value in buying low

Just because yields on speculative-grade debt are falling toward the lowest ever, that’s not a good enough reason to avoid it, JP Morgan Asset Management’s chief investment officer says.


Bloomberg News

advertising

All those bond investors fretting about a bubble will probably be right eventually.

In the meantime, they may want to think about buying some junk debt.

That’s how Bob Michele, who oversees $380 billion as JPMorgan Asset Management’s chief investment officer for fixed income, is approaching the market.

Just because yields on speculative-grade debt are falling toward the lowest ever, that’s not a good enough reason to avoid it, he said.

“Ultimately there will be a bubble,” Michele said.

As for now, he said, “there’s only so long that you’re going to sit in cash earning a zero percent return in the U.S., perhaps a negative yield in Europe, before you go back into some form of bonds.”

Michele isn’t alone in seeing value in junk bonds, despite Federal Reserve Chair Janet Yellen’s suggestion that the market has gotten frothy.

While high-yield notes in the U.S. posted a 1.3 percent loss last month, their first in almost a year, they’ve bounced right back with a 1.5 percent gain in August, Bank of America Merrill Lynch index data show.



Free 4-week trial, then $99 a year for unlimited seattletimes.com access. Try it now!

Also in Business & Technology

News where, when and how you want it

Email Icon

Free 4-week trial, then $99 a year.

Free 4-week trial, then $99 a year.

Unlimited seattletimes.com access. Try it now.

Advertising

Advertising


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►