High income levels an attractive prospect in corporate bond sector

Corporate bond markets provided investors with great opportunities over the course of the past few months, contrasting with the view of many that the area is comparatively sleepy.

In the three months to 31 July, the median UK corporate bond fund returned 10.1%, a substantial rebound following the tribulations of 2008. We all knew corporate bonds were hugely undervalued earlier this year, but has this recent rally taken the attraction away? One of the big fears for debt investors is future inflation – a possibility, given the uncertain times we live in. A rampant rise in prices will normally depress the value of fixed income investments, particularly government debt. I noted above the performance of the Sterling Corporate Bond sector since beginning of May. Over th...