What next for the high yield sector?

Last year was a game of two halves for the high yield sector. It kicked off with an encouraging corporate reporting season and continued smoothly for a few months against a supportive backdrop of quantitative easing and low interest rates. But then came the storm. Summer was clouded by US and eurozone debt issues, sending markets into disarray. Months of extreme volatility followed, only to be further fuelled by credit rating downgrades across Europe. Considering funds in the high yield sector must invest more than 50% of their assets in fixed income securities with credit ratings bel...