NB Monthly Income looks to non-IG credit for 2021

'One of the best games in town'

Non-investment grade credit in developed markets is "one of the best games in town" moving into 2021, as defaults decline and a lack of income-generating securities tempts investors towards the asset class, according to Neuberger Berman’s Vivek Bommi.

Bommi said he expects non-IG credit to have a similar year to 2017, when volatility remained relatively low and returns were good, through 2021. He noted that a tough 2015, with the oil price crash and worries over a hard landing for the Chinese economy, was followed by a ferocious rally the following year. That led market participants to incorrectly surmise 2017 would be a volatile year with little scope for spread compression. After a tricky first half of 2020 due to the coronavirus pandemic, most assets have recovered with that rally accelerating in recent weeks with positive news ...