Modest growth climate favours corporate bonds

UK corporate bonds will outperform government bonds when the climate of fear in the markets eases, a...

UK corporate bonds will outperform government bonds when the climate of fear in the markets eases, according to Alix Stewart, investment director at Standard Life Investments. Stewart says: 'We are in a low inflation, low interest rate, modest growth environment. This is not terrible for government bonds, but they look vulnerable given the big safety premium they have priced in just now.' However, he says: 'Corporate bonds will like the conditions better. They should outperform government bonds once the fear in the markets begins to subside. All they need is for equity markets to st...