{"id":199241,"date":"2010-01-19T12:49:00","date_gmt":"2010-01-19T17:49:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/europe-opens-its-arms-to-a-new-age-of-junk-bond-investing-2010-1"},"modified":"2010-01-19T12:49:00","modified_gmt":"2010-01-19T17:49:00","slug":"danger-european-junk-bonds-are-now-the-hot-new-retail-product","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/199241","title":{"rendered":"DANGER: European Junk Bonds Are Now The Hot New Retail Product"},"content":{"rendered":"

\"garbagetruck<\/p>\n

Where junk bonds were once the game of hedge funds and private equity firms, they are now being re-branded as high-yield investments in Europe notes the Financial Times<\/a>.<\/p>\n

More and more regular investors and funds are dipping into the European high-yield bond pool, and issuances have increased 40 percent to respond to the demand.<\/p>\n

This is liable not just to attract new entrants to the market in Europe, but also their high-yield experienced American counterparts.<\/p>\n

“As European issuance, as a proportion of the global high yield market grows, you will get a virtuous circle effect as US fund managers start to allocate more of their global funds to Europe,” Mr Newman (portfolio manager at Rogge Global Partners) believes.<\/em><\/p>\n

Try as you might to sound the alarm, this is inevitable for the same reason that high-yielding CDOs took off as a popular vehicle for pension funds. People just need yield. It’s not that they’re incredibly risk-averse or dumb, they need more money in an age of 1%.<\/p>\n

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