Opps emerge in Euro ABS and US municipals

ON BONDS

Schroders' Bhupinder Bahra discusses the valuation opportunity US municipal bonds and European asset-backed securities.

After much talk of a double-dip in 2010, we believe the risk is now remote. Nevertheless, we expect western central banks to keep base rates low to maintain the attractiveness of risk assets (with the aim of driving wealth creation and, in turn, stimulating further growth). This scenario paints a positive picture for corporate debt, with good opportunities still available in high yield, emerging market corporate bonds and several investment grade names, particularly in the US. Furthermore, there is now a valuation opportunity in two further asset classes – US municipal bonds and European...