European high yield was one of the best performing fixed income sectors in 2023, and the outright fixed income top performer in US dollar terms. We assess if this strong performance can continue in 2024.

What does this mean for fixed income investors?

Without a major weakening in economic growth or a reacceleration of inflation in the eurozone, we would expect that reasonable spreads and all-in yields well above 10-year averages should provide an attractive return opportunity for European high yield investors, even after 2023’s stellar 11.8% total return (15.8% in US dollars). The technical outlook strengthens our conviction. However, selectivity. As a result, investors will need to look beyond the surface of the market to understand where the true opportunities and risks currently lie.

About the Bond Bulletin

Each week J.P. Morgan Asset Management's Global Fixed Income, Currency and Commodities group reviews key issues for bond investors through the lens of its common Fundamental, Quantitative Valuation and Technical (FQT) research framework.

Our common research language based on Fundamental, Quantitative Valuation and Technical analysis provides a framework for comparing research across fixed income sectors and allows for the global integration of investment ideas.

 

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The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit and accounting implications and determine, together with their own financial professional, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.
 
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