Opportunities remain in bonds

Despite a benign inflationary outlook there are still compelling yields to be found in the corporate bond market

Corporate bond spreads have narrowed significantly in recent weeks as liquidity conditions have improved. Bond markets are now priced for more typical recessionary conditions rather than discounting Armageddon as they were 12 months ago. A benign inflationary outlook, a policy of low interest rates and attractive valuations all provide a background whereby corporate bonds can make further progress. And, on a selective basis, there are still compelling yields to be found. Corporate bonds have been an exciting area of the investment markets in 2009, with unusually high issuance, strong ...