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Appeal of Risk

Appeal of RiskAppeal of Risk

High-yield bonds, disdained by investors less than a month ago, have become the most sought-after fixed-income assets as dissipating volatility in the energy market has investors around the world rediscovering the appeal of risk, Bloomberg reported. Junk-rated corporate debentures are poised to deliver gains of 2.3% for February, the best monthly result since 2013, while investment-grade debt has registered losses. Investors are also returning to the equity markets, with the MSCI All-Country World Index touching a record Thursday after two losing months. Appetite for risky investments has been fueled by unprecedented stimulus from central banks including the European Central Bank and the first monthly gain in oil prices since June, which has diminished the threat of deflation.

Financialtribune.com