Andrew Birt, associate director - investments at Saunderson House, assesses the relative merits of European and US credit markets.
The past four and a half years were extremely profitable for corporate bond investors. The yield on the Bank of America Merrill Lynch Global Broad Corporate bond index has fallen from nearly 8% in December 2012 to just above 3% now, having been below 2.5% at the end of April this year. However, the recent tick-up in yields – no greater than rises seen in late 2010 or mid 2011 – has prompted much discussion about the place for corporate bonds. The trigger for the sell-off in corporate bond markets was, initially, improving US data in May – with the unemployment rate hitting a four-year...
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