Benjamin Conquet, BNP Paribas Investment Partners |
The all time highs enjoyed by corporate bonds over the past couple of years may be over, but the sector still offers attractive yield-based returns.
Bond returns have been fantastic for the last two years, with high yield delivering over 60 per cent in 2009, and a still-attractive 15 per cent last year. Any remaining scope for spread contraction is therefore limited, and the market has consequently become yield-based, with fund managers managing down their clients’ expectations towards mid-single digit returns.