Continuing demand for corporate bonds

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With increased demand from pension funds and equity markets still posting poor returns this year should prove to be another profitable one for fixed interest assets and corporate bonds in particular

The sterling corporate bond market is ' outside of the US ' the oldest in the world. It is now larger than the gilt market and has become a popular asset class in its own right ' helped in no small part by technical factors at work and the bear market in equities. First, the technical factors are basically a big increase in demand for high-quality corporate bonds from pension funds and life companies. With the up and coming introduction of FRS 17 and the abolition of the minimum funding requirement (MFR), pension funds have been turning to corporate bonds as a way of decreasing volatili...

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