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Man Group Warns: Yield Hunt Risks Bond Investors
28 Jul
Summary
- Man Group investors express concern over Additional Tier 1 bond complacency.
- Complex bonds are being bought by investors hungry for yield.
- Current bond spreads suggest inadequate compensation for risk.
Investors are exhibiting excessive complacency towards Additional Tier 1 (AT1) bonds, the most speculative category of bank debt. This assessment comes from investors at Man Group, who indicate that current market spreads appear inadequately tight given the associated risks.
The intense demand for yield is driving investors to acquire complex bond structures without thorough consideration. This situation highlights a potential disconnect between the perceived safety of these investments and their actual risk profile.
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