Single A and BBB bonds offering greatest upside

Single-A and BBB investment grade bonds will outperform AAs and AAAs this year, according to Jim Lea...

Single-A and BBB investment grade bonds will outperform AAs and AAAs this year, according to Jim Leaviss, manager of the M&G Gilt and Fixed Interest fund. Leaviss says there has been a large degree of over-compensation for default risk in corporate bonds and on a risk/return basis it currently makes sense to invest lower down the yield curve. While AAAs outperformed BBBs last year, Leaviss says they are now too expensive and there is little room for any upside, with the real value to be found at the lower end of the market. Indeed, on average over the past 10 years BBBs have outperfor...