"The last several weeks there's been a lot of press given to the weak economic data and slowing growth numbers, and that's led to a downturn in equities," said Jim Merli, head of debt distribution and origination at Nomura Securities, "We're of the view that we are going to see relatively modest growth at a level which will be positive for the credit markets."
If interest rates stay flat or fall further, high yield could continue to benefit as investors eschew low-yielding Treasurys and investment-grade debt. But despite its continued strength, high yield remains a risky asset class.
"It is important to recognize that not all high yield risk is the same and downside still exists," Smith said. "It's a bond-picker's market now and will continue to be for the next 12 to 18 months."
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