BB-rated high yield credits best to deal with slow growth

BONDS

Investment grade, high yield and government bonds performed well year to date with total returns across the asset classes over the first half of 2010 being highly correlated.

July saw a slight reversal of the situation, with some divergence among asset class performance and high yield emerging as the clear front-runner, outperforming investment grade and government bonds. Despite good performance numbers, all have been affected by uncertainty over the impact of the sovereign debt crisis on global growth denominated credit. The EU and IMF’s €750bn rescue package for Greece and other countries on the European periphery has served to address some of the concerns the market and investors held over the ability of countries such as Greece, Portugal, Spain and Ir...