Debtwired! High Yield trade thoughts with Clark Nicholls
Jun 6, 2025
In this discussion, Clark Nicholls, CIO of Aucit Investment Management, shares insights into the European high yield market. He highlights current trends, including tightening spreads, and emphasizes the importance of risk management strategies. Nicholls delves into the potential of both high-rated credits and riskier CCCs for savvy investors. Additionally, he discusses the value analysis of key sectors, suggesting contrarian investment strategies that could yield significant returns despite market volatility.
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European High Yield's Appeal
- European high yield offers strong risk-adjusted returns, especially with short-duration bonds.
- Market inefficiencies and rising stars among credits support performance and defensive portfolios.
Use Short Duration Bonds
- Invest in short maturity high yield bonds to limit principal loss if markets widen.
- Use a portfolio approach to balance single name volatility and improve defensive returns.
Exploit Market Inefficiencies
- Build scale and market familiarity to exploit high yield market inefficiencies.
- Engage early with new bond issuers for better allocations and insights.