Old Mutual confident UK bonds spreads can tighten

Old Mutual is confident UK corporate bond spreads, now offering 0.6% yield over gilts, can tighten f...

Old Mutual is confident UK corporate bond spreads, now offering 0.6% yield over gilts, can tighten further during the course of the year. Old Mutual fund manager Stephen Snowden does argue a spread of 0.6% did not look stretched compared with how the fixed interest markets behaved for much of the 1990s. He pointed out that in 1997 the spread was just 0.4%, coinciding with a period of low market volatility, as is the case today. He believes investors are still being well rewarded for holding corporates. Research from Barclays Capital and Moody's suggests that investment grade corporates ...