The Q1 2022 European High Yield Survey Results Are In!

Thank you to Everyone who took part, especially to Mahesh and Bhumika for their analysis.

Overall the survey points to a consecutive decline in risk appetite with Underweights no out numbering the Overweights. Valuations are deemed rich and cash is not trash with 76% of respondents holding 3% or more in cash. This compares to 65% of respondents in Q4 and over 15% reported having more than 10% cash sat on the sidelines.

Single B’s are seen as the Goldilocks position with Investors having the highest overweight. BB’s are net neutral whilst rate sensitive Investment grade and risky CCCs are both large underweights.

Sector wise Financials represented the largest overweight whilst communications were net underweight. European high yield is favoured over its US counterpart with 55% of respondents backing the asset class.

Defaults expectations remain low – it will be interesting to see how this develops as we enter the second half of the year with central banks tightening, consumers feeling the pinch and signs that economic growth is slowing.

The full analysis by Bloomberg Intelligence can be downloaded here

Join Mahesh and I on the 9th of February at 9 a.m. UKT for a Bloomberg Intelligence hosted webinar where we discuss the latest survey and the path ahead. Register here

Finally – if you are one of the 3000 odd people who read the survey online and on the Bloomberg Terminal, but you did not participate – please sign up using the form below! Your view counts and the survey takes minutes. Stronger. Together.