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Searching for Yield in a Low-Yield World

Fixed Income Yield Opportunities

Investors are turning to high-yielding bonds as low government yields fall short of income objectives.

High-Yield Fixed Income Services

Visit our Product Center to learn more about our Fixed Income products, or click the button below to request more information.

Where we see the opportunity:

  • The Search for Income
  • Risk Considerations Drive Investment Path
  • Markets Evolve: US High Yield
  • Markets Evolve: Emerging-Market Debt
  • No Single Sector Leads All the Time
  • AllianceBernstein’s Approach to High-Income Investing

Explore other key resources for the Fixed Income Yield Opportunity

White Paper

Is There Life After the Rally?

The Euro Fixed-Income Opportunity in 2010
PDF

Opportunity Summary

Is There Life After the Rally?

The Euro Fixed-Income Opportunity in 2010
PDF

White Paper

Coming of Age

New Opportunities in Maturing Euro High-Yield Market
PDF

Newsletter

Fixed Income Focus

European Trends
PDF

Flyer

Euro High Yield

PDF

Webcast

Opportunity in High-Yield Fixed Income

Webcast

Webcast

In Search of Better Bond Strategies:

A Fresh Persepctive
Webcast

Opportunity Summary

Searching for Yield in a Low-Yield World

PDF
What are the challenges within the European high-yield opportunity?

Ivan Rudolph-Shabinsky: Diversification. The European high-yield market has approximately 150 issuers. Only half of those have enough liquidity to be traded in any size, and as an active manager you only want to own a portion of those securities. So if you restrict yourself to European high yield, your portfolio may only be about 35 or 40 securities. If any one of those securities has a meaningful loss or default, it will impact the portfolio.

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Were there many opportunities in the middle of the credit crisis, given the shutdown in the capital markets?

Arif Husain: With the fallout from the credit crisis many companies are entering the European high-yield market for new funds because credit from their banks is no longer available. The other new entrants are fallen angels. Fallen angels are those companies that used to be rated investment grade but have unfortunately been downgraded to sub-investment grade high yield. A fallen angel isn’t necessarily a bad investment just because it’s been downgraded. In fact, our research shows those are actually extremely good investments to make.

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What are the advantages of being a global organization when it comes to running a European high-yield strategy?

Ivan Rudolph-Shabinsky: I think the global organization simply has more resources to analyze the investment problems that we face. A smaller European high-yield manager may not have the expertise to deal with financial companies in a portfolio. As a global organization, we have a lot of experience analyzing financial companies around the world. For investment-grade bonds that have been downgraded, we can take a look at them right away and identify the opportunities because our investment-grade analysts have been following these very same companies.

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What are the current opportunities?

Ivan Rudolph-Shabinsky: I think the opportunities going forward are going to be very dynamic, as they always are. Going forward, CCC bonds are likely to underperform. CCC bonds are typically issued into the high-yield market and they are not very strong securities, but last year, when spreads were compressing, they did great. However, in a more normal environment, they tend to underperform B and BB bonds. We will be in a situation where we will reduce our positions in CCC.

Show

WEBCAST

Opportunity in High-Yield Fixed Income

In this interview, Arif Husain and Ivan Rudolph-Shabinsky, co-heads of our European Fixed Income business, discuss our approach to the opportunity in the European and global high-yield markets.

WHITE PAPER

Coming of Age

New Opportunities in Maturing Euro High-Yield Market

The euro high-yield market is poised for dramatic growth, driven by a wave of fallen angels and a shift from bank financing toward capital markets. We believe that investors who understand the market’s structure and have the research skills to analyze individual issuers will discover an abundance of promising opportunities.