There is significant dispersion in the European High Yield market indicating an increasing divergence between BB/B and CCC rated credits.
Unlike in the European market, this divergence did not occur in the same magnitude in the US. European dispersion is mainly driven by concrete events in large issuers and idiosyncratic names mainly related to the Telecom and Tech industries.
Non-fundamental, but technical driven selling pressure in specific situations offer partly attractive entry points as many investors are restricted to tap this market. This leads to interesting investment opportunities and presents a favorable environment for deeply fundamental and actively managed portfolio managers within the high yield spectrum.
