Bonds: have we reached the bottom yet?

Worst half year since 1997

Inviting investors to buy a fund focused mainly on investment-grade credit? For the past few years this has made me as welcome as someone coughing in a supermarket at the height of the pandemic.

With yields so low, it is not surprising. But perhaps that is changing. UK corporate bonds have had their worst half-year since at least 1997. The ICE BofA Sterling Corporate and Collateralized Index fell by 14.7% in the first six months of 2022. To put this into context, the previous record was a fall of 4.75% in the first half of 2008. The total return for that year was -8.58%, representing the worst full year on record. It may be of some comfort to know this was followed in 2009 by record performance of 15.18%.   Until this year, the index had never seen six months of consecu...