High-yield paper set to gain as economy firms

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Schroders is banking on global economic recovery in 2004 to underpin outperformance by lower rated c...

Schroders is banking on global economic recovery in 2004 to underpin outperformance by lower rated corporate bonds and index-linked paper. The group also predicts widespread central bank tightening of monetary policy in the first six months of next year, leading to higher interest rates. Bob Michele, head of fixed income at Schroders, says: "As the global economy continues to firm, the appetite for credit risk is unlikely to recede. Investors believe this is a relatively safe environment to capture the extra yield of those lower rated issues." In the UK and Europe, he expects investmen...

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