Muted growth and inflation makes credit attractive

ON BONDS

Aviva Investors' Chris Higham explains why credit can deliver where equities and sovereign debt struggle.

Given the strong performance enjoyed by credit investors during the past two years, it is natural to view the comparatively staid outlook for corporate bonds as relatively unappetising. However, this is arguably in a sweet spot for UK and European credit, in which moderate levels of economic growth will be supportive of improving corporate profitability, low default rates and steady, but unsurprising, interest rate rises. Overall, the outlook for credit remains positive. However, the strength of credit markets in recent months has meant attractive valuations have become rarer, suggest...