The oil price slump and high yield’s fallen angels
14-05-2020 | Productwebinar
The steep decline in oil prices – briefly turning negative for the first time in history before settling to 18-year lows –rattled high yield bond investors. It was caused by a perfect storm, as demand for oil collapsed during the Covid-19 crisis, while over-supply continued due to a spat between major producers Saudi Arabia and Russia. Prices remain low, requiring careful navigation.
Client Portfolio Manager Joop Kohler outlines its likely impact on the high yield bond market, which contains a large number of shale oil producers. He provides an update on how it’s affecting Robeco’s Global High Yield Bond fund, and outlines the latest trades and positioning. He also comments on recent downgrades from investment grade to high yield.