Volatile outlook for corporate bonds

The UK corporate bond market was particularly challenging to analyse during June. At first glance, c...

The UK corporate bond market was particularly challenging to analyse during June. At first glance, corporate bonds performed particularly well, with a total return of 1.8% (capital plus income). However, closer observation shows the capital gains for the month can be attributed as follows: 1.9% from the performance of the underlying gilt market and -0.9% for the negative impact of widening corporate bonds risk premiums. Further analysis reveals that the widening of the risk premium had a -0.3% impact on the AAA-rated sector and -2% on the BBB sector. The same analysis by industry s...