Credit outperformance seems likely

Fund manager's comment

So far, this has been a bad year for sterling credit. In total return terms, gilts have returned 2.2...

So far, this has been a bad year for sterling credit. In total return terms, gilts have returned 2.25%, 0.9% more than iBoxx Sterling Corporates. There have been good reasons for this outperformance of gilts, but looking forward, there are other good reasons to expect credit to outperform into the year end. First, this is not 2002. Credit events such as Enron and WorldCom have not soured the investment landscape this year. In 2002, confidence was so low following fraud and accounting scandals that regulatory intervention was stepped up to address investor concerns. By contrast, this year ...