Long-term quantitativeargument forcredit market

A study of the recent history of corporate bonds shows they can offer investors a more attractive risk-return profile than gilts and provide more stable long-term returns than equities ' particularly in falling markets

When talking about the potential benefits of corporate bonds, the quantitative argument that underpins any allocation in modern portfolios is often largely ignored. This article seeks to address this issue. In particular, I will focus on some of the evidence that supports the long-term strategic role for corporate bonds as well as the impact that rising interest rate expectations or rising equity markets has on the corporate market. To recap, investors have historically bought bonds for several reasons. One of the most important of these is that they offer an effective means of diversi...