Portfolio manager and President of Fidelity's High Income and Alternatives division, Harley Lank, shares his insights on current market conditions, what the significant forces moving the high-yield market globally are, and how to navigate uncertainty as investors try to find their footing. Harley believes high yield is a great portfolio diversifier and one of the most attractive asset classes over time. For Canadian investors, Harley manages Fidelity American High Yield Fund, which is currently composed slightly more defensively than the broad market; less than the benchmark in energy and greater than the benchmark in information technology. Harley is staying disciplined in his approach and looking for opportunities that offer less fundamental risk but still offer potential for yield. Looking at inflation, Harley thinks inflation expectations are being hyped in a muted demand environment. He also believes the market has a renewed sense of confidence as a result of the Federal Reserve and administration using a ‘do whatever we must’ approach to prop it up in advance of the election.
Recorded on July 28, 2020.