Excerpt:
An investor who assumes no further improvement in price or spreads would earn the yield to maturity of 9.04% at month-end in January.
An investor who assumes no further improvement in price or spreads would earn the yield to maturity of 9.04% at month-end in January.
Given that many asset allocation models assume a 9-10% annual return over the long term, this almost equity-like figure is relatively high compared to an investment universe where government bonds, stocks and money markets have offered paltry yields (e.g. the 3-month T-bill was yielding just 0.079% at the end of January).
Conclusion...
We believe a strategy that contains a balance of high yield, equity, convertible and bank loan securities is prudent, given the anticipated investment environment. Allocations within Pioneer’s own fixed income strategies – in particular our high yield and global high yield strategies – reflect this view. Investors should speak with their financial advisors about a portfolio allocation appropriate to their needs.
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