Legg Mason, Western Asset looks to bank loan, high yield and investment grade for future growth

By Cristal Cody

Tupelo, Miss., Oct. 22 - Looking ahead, Legg Mason Inc. and Western Asset Management Co. like the bank loan, high yield and investment grade sectors for investment potential, Stephen Walsh, chief investment officer for Western Asset Management said Wednesday during Legg Mason's market conference call.

Michael Buchanan, portfolio manager for high yield securities for Western Asset, said during the call that the agency also has started investing in lower-rated securities.

"We did see opportunity and value in the market and started to go from some double-B securities and into some of the lower rated securities," he said.

High yield securities rated double-B are down 15.9% compared to a fall of 22.2% for B rated securities, he said.

The current market has created some compelling anomalies for the funds.

"It's allowed us to do attractive relative value swaps," Buchanan said. "We're ultimately trying to position the portfolio in a way we think will benefit over the next few quarters."

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