High Yield Attractive Again But Beware Metals & Mining Bonds

The lower possibility of a recession in the U.S. is making high yield bonds attractive again, but that does not mean every sector is out of the woods, said Ray Kennedy, portfolio manager for the Hotchkis & Wiley High Yield Fund (HWHAX). 'We definitely are approaching a valuation point that will have a sustainable attractiveness for investors,' said Kennedy. The Hotchkis & Wiley High Yield Fund is down 2.6% thus far in 2016, according to fund-tracker Morningstar. The $2.1 billion fund, which sports a trailing 12 month yield of 6.8%, has returned an average of 3.3% annually over the past five years, outpacing 52% of its peers in Morningstar’s high yield bond fund category. Kennedy said the high yield market has weathered through the worst of the pain inflicted by the energy sector and may see a recovery later this year.