Despite poor sentiment, all the long-term factors supporting the case for corporate bonds remain in place, namely modest economic growth, low inflation and low interest rates coupled with strong secular demand and healthy supply
We have seen a lot of headlines about defaults, fallen angels, negative credit migration and so on over the last few months. In reality, the corporate bond market continues to produce widely divergent returns, between credit rating categories, industrial sectors and individual bonds. Just like in the equity market, the recent shakeout has revealed some interesting valuations in a number of areas. And just like in the equity market, not all of them represent good investment opportunities. The ability to sort the wheat from the chaff now will add real value in the future. It is importa...
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