High-yield corporate credit surge to continue.

Investment Adviser, June, 2009

Byline: Daniel McAllister

The "surge" in the high-yield corporate credit market is set to continue, but the asset class is losing its appeal after the recent jump in prices, according to Lombard Odier.

Paul Marson, chief investment officer at Lombard Odier, said the corporate credit market rally had further to go, but that valuations were no longer as compelling after the strong performance, with high yield trading closer to fair value.

He said: "We would, therefore, refrain from adding positions at current levels, as valuation is now less appealing, and credit fundamentals will remain under pressure from rising defaults."

The high-yield corporate credit market, or junk bond market, has seen a sharp rebound since the start of the...

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