Pioneer fund to invest in emerging market junk bonds

Junk mail envelopesPioneer Investments has launched a fund that invests in high-yield corporate bonds – sometimes known as “junk” debt – in emerging markets, giving investors a

tool to gain specific access to this fixed income segment.

Bonds issued by emerging market corporates have become popular in recent months as investors have sought alternatives to low-yielding debt instruments in developed markets. High-yield bonds offer the potential for even greater returns, but with greater risk of issuer default.

Lead portfolio manager Greg Saichin said the fund offered exposure to a growing asset class.

“All it takes is a little growth for us to seize higher quality returns with lower volatility,” he said. “The asset class profits from credit convergence in the long term whilst having the benefit of higher yields short term.”

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