Corporate bonds returns could be as high as 5.5% over the next twelve months if gilt yield and sprea...
Corporate bonds returns could be as high as 5.5% over the next twelve months if gilt yield and spreads remain unchanged, according to Legal & General.
With the spread tightening, however, returns are more likely to be around 4.5%.
L&G estimated at its Fundamentals briefing this week that the potential range for corporate bond returns was going to be between 4.5% and 5.5% over the next year.
Even in the worst case scenario - where gilt yields rise without a change in spreads - the total return would still be around 3.0%, L&G says.
However, good corporate bond fund managers can reduce the impact of the yield rises still further and therefore expect even higher returns than estimated, L&G adds.
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