Benign economy benefiting corporates

Fund manager's comment

With low and falling default rates, risk appetite has grown with investors increasingly prepared to ...

With low and falling default rates, risk appetite has grown with investors increasingly prepared to invest in lower rated and longer dated bonds than they may traditionally have invested in. This is exemplified by the astonishing performance in the high-yield market over the last two years. Even though the rating agencies have mooted downgrading the big US Autos to junk status (below triple-B), the march of the credit markets has not been stopped. The French government's issuance of 50-year debt provided an ultra long benchmark for Telecom Italia to issue 50-year Euro debt. Similarly it...