Investec's Stopford sees best value in BBB credit

Investec Sterling Bond manager and co-head of fixed income John Stopford believes BBB-rated credit is currently the most attractive area of the bond market in risk/return terms.

Despite the strong rally already seen from the lows in March, Stopford says all grades of credit continue to offer very good value versus government bonds over the medium-term. However, Stopford says BBB-rated credits hit the “sweet spot” in terms of risk and return, based on fundamentals, valuations, and technical considerations. “Cash continues to pour into credit funds, attracted by the prospect of good risk-adjusted returns. We do not see this changing in the short term,” he says. “In terms of fundamentals, we believe that many investment grade rated companies are well position...