Risky high-yield debt is poised for significant underperformance, according to the firm’s analysts.
Goldman strategists are telling clients to be ready for “a sustained period of low returns.”
Record outflows hit funds that buy investment-grade debt from the likes of Apple Inc. and Ford Motor Co.
Allocation to American stocks is 21 percent overweight, the highest since January 2015.
Trade tensions have been the fly in the ointment for those betting on a strong global economy.
Lenders may be ushering in a slowdown as they pull credit out of alarm over an inversion of the yield curve.
Negative returns are likely to scare off retail investors, JPMorgan analysts said.
They reckon benchmark yields are poised to climb to 4 percent over the next 18 months.
It’s getting easier to make the case that the probability of outsize losses is rising.
Strategists know their year-end outlooks could come back to haunt them.
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