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High Yield Compelling, Converts Offer Upside Says GAM Manager

The selloff in high yield bonds is creating a buying opportunity due to the low rate environment, said Jack Flaherty, Investment Director at GAM.

The selloff in high yield bonds is creating a buying opportunity due to the low rate environment, said Jack Flaherty, Investment Director at GAM. Flaherty added that the downturn in junk bond prices is due to the drop in oil prices and valuations are becoming compelling. He said he is short duration in Europe because yields are so low that the risk/reward ratio is favorable. Meanwhile, he said he expects the Federal Reserve to begin raising short term rates in the second half of 2015. Finally, Flaherty said he is bullish on convertible bonds across the board because he gets paid to wait for upside surprises.

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