Credit market on rise despite volatility

The return from the sterling investment grade credit market is currently some 75 basis points ahead ...

The return from the sterling investment grade credit market is currently some 75 basis points ahead of gilts, with a return of circa 5.8% year to date. On the face of it, a good result, and the sort of steady outperformance over gilts that we have come to expect from this asset class. What this number hides is the volatility that the market experienced over 2005 to get here. Back in mid-May, returns from the credit market over the year were some 40bps behind gilts and fears of forced unwinding of correlation trades by the hedge fund community were very high. Over the summer, the market ...