Research needed to seek out creditwith promise

While the corporate bond sector has outperformed equities in recent years, the asset class is still exposed to market volatility and stockpicking is key to beating the market as a whole

While investment grade corporate bonds outperformed gilts last year, we have seen unusual levels of volatility, both at the sectoral and issuer level. The frenetic pace in markets caused by the difficult economic and corporate earnings environment has driven investors to wheedle out the winners from the losers dispassionately and with ever increasing ferocity. Indeed, those corporate bond funds outperforming in 2002 would likely have done so by avoiding the losers. The supply and demand picture differentiated the returns of investment grade corporates from government bonds, with deman...