JPMorgan Fund That Sold Junk Debt Before Crash Is Diving In

JPMorgan Fund That Sold Junk Debt Before Crash Is Diving In

JPMorgan Fund That Sold Junk Debt Before Crash Is Diving In | Businessliveme.com - Business News Middle East





(Bloomberg) “” Three months ago, Arjun Vij couldn't wait to sell all his junk bonds. Now he can't get enough of them.

In a strategy U-turn, Vij, who helps oversee JPMorgan Asset Management's $1.2 billion Global Bond Fund, is buying high-yield corporate debt and emerging-market dollar bonds on expectations that the world has already seen the worst of the coronavirus pandemic.

Policy makers are "willing to keep the economy running unless it gets extremely bad, so the threshold is quite high“ for another global shutdown, said Hong Kong-based Vij, who sees a 10% chance of another worldwide lockdown happening.

Vij's playbook reflects how investors have leaned into the view of a strong global economic rebound supported by record liquidity from central banks. While some have sounded the alarm over the exuberance in markets, risk assets from equities to emerging-markets have shown no signs of slowing from a three-month rally.

In a reflection of this optimism and support from the Federal Reserve, returns on U.S. junk bonds have risen about 11% since April, largely erasing the previous month's losses. Vij, who slashed his fund's high-yield allocation to zero