London
INVESTORS scooping up the riskiest emerging-nation corporate bonds in an indiscriminate rush for yield are facing a growing clamour of warnings.
While a 12.4 per cent return this quarter on company debt rated eight levels below investment grade rewarded those who pushed into the fringes of the debt market, sub-investment grade defaults have reached a six-year high. Societe Generale SA and Bank of America Corp are predicting a correction, and on Thursday, Hermes Investment Management said it's time to "increase vigilance and move up in quality", echoing BlackRock Inc's earlier call to be more selective.
"There's a danger that people get complacent after a rally like this," said Siddharth Dahiya,...
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