Goldman Fund Manager Weighs Junk Return on Yield Magnetism
- Spreads look pretty attractive by historic standards: Moffitt
- Investor looking for stability in China data, oil prices
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Goldman Sachs Asset Management says the worst of the credit-market selloff is probably over and it’s now waiting for a sign that the situation has stabilized so it can plow cash back into U.S. junk bonds and other corporate debt.
Credit went into meltdown this year as questions mounted around the efficacy of central bank policies and the ability of China’s government to stem capital outflows while maintaining economic growth. The selloff pushed spreads on high-grade and junk-rated company bonds in the U.S. to levels unseen in at least 3 1/2 years. Once sentiment becomes less negative, the “magnetism” of the yields on offer will draw investors back, said Philip Moffitt, the fund manager’s Asia-Pacific head of fixed income.