Here's Why One Portfolio Manager Is Moving Into Riskier Debt

Monday's selloff in the bond market didn't surprise Dave Wright, portfolio manager and co-founder of Sierra Investment Management. "We've had a hunch that possibly we're finally near a long-term bottom in bond yields," explains Wright, who hedged his portfolio holdings for the expected declines. Wright also has begun shifting his allocations, and says the "risk on" trade is back on for bonds. He thinks emerging markets are attractive again and has increased his allocations in that sector, and has also increased his position in high-yield debt. For the last few years, Wright's largest position was in municipal debt, but he has trimmed those holdings.