Schroders: The fixed income sector offering the best value in 25 years

Schroders' fixed income managers have been adding to US municipal bonds across their portfolios on the view that the sector is ripe for reappraisal by investors.

Speaking at a conference in New York, Schroders portfolio manager Neil Sutherland said US municipal bonds are "by far our biggest conviction in investment grade corporate credit at the moment." This is because the bonds, which are tax-exempt for US retail investors but are also now being bought by Schroders' US and UK bond managers, are currently 27% cheaper than comparable taxable debt, according to the group. The high-profile troubles of US municipal authorities such as the city of Detroit, coupled with concerns over the Federal Reserve tapering its QE programme, has prompted 22 con...