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Pioneer's Feltus, Top Junk Bond Fund Manager, Prefers U.S. Debt
2007-05-23 09:02 (New York)
By Caroline Salas May 23 (Bloomberg) -- Andrew Feltus, manager of the top-performing Pioneer Global High Yield Fund, expects U.S. junkbonds to outperform those in Europe and emerging markets becausethe Federal Reserve will refrain from raising interest rates. Feltus, who runs the fund at Pioneer Investment Managementin Boston, said policy makers will hold their target interestrate at 5.25 percent for the next 12 months, encouragingeconomic growth and keeping risk premiums on speculative-gradedebt close to record lows. There is about a 25 percent chancethe Fed will lift rates to contain inflation, he said. ``My No. 1 risk is inflation,'' not slowing economicgrowth, Feltus, 38, said in an interview. ``If inflation rises,it would kill the stock market, which would kill riskappetite.'' The $1.8 billion mutual fund has returned 5.9 percent thisyear, placing first of 15 rivals that buy below-investment-gradedebt of companies around the world, according to data tracked byBloomberg. It has climbed an annual average of 14 percent overthree years, ranking second behind the MainStay Global High