Snowden: value in majority of corporate bond funds ‘exhausted'

Old Mutual Corporate Bond fund manager Stephen Snowden has warned the value in many investment grade credit funds has been completely exhausted despite the overall market remaining at distressed levels.

Snowden, the top-performing manager in the IMA £ Corporate Bond sector last year, says the majority of funds are significantly overweight sectors such as telecoms and pharmaceuticals, which he believes are back at bull market valuations. The manager says while credit markets remain at historically wide spreads, the majority of any further gains will primarily be in cyclical and consumer names. “We are still at incredibly distressed levels for the market as a whole. But the index hides many moving parts, one of which is the common sense corporate bond,  which is ferociously overvalued,...