The problems roiling the junk bond market are isolated to the energy sector and investors should use this selloff as a buying opportunity, said Poul Kristensen, portfolio manager for the MainStay Retirement 2030 Fund (MRTTX). ‘The spread between high-yield energy issuers and non-energy issuers is the widest we have seen in decades,’ said Kristensen. ‘We think the problems are very concentrated in that area and valuations are starting to look attractive from a long term perspective.’ Kristensen also co-manages the MainStay Absolute Return Multi-Strategy Fund (MSAKX) and helps oversee $9.26 billion at New York Life Investment Management’s Strategic Asset Allocation & Solutions Group. In his view, the Federal Reserve will likely raise rates this week, but commentary in the press statement and the press conference will be cautious, emphasizing that this is a step in a process that is going to be very gradual. As a result, the economic environment should be supportive of high yield. In particular, he said short-duration high yield should benefit from a slow increase in short-term interest rates and a positive high yield environment.
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