Why sterling credit is now an 'attractive' opportunity

Valuations across the bond market are looking expensive. The relationship between duration and yield is stretched to the extreme.

For us, the rewards on offer in most areas of the market are not high enough to compensate fully for volatility risk, especially in longer maturities. Hermes, UBS and Federated launch engagement high yield funds If growth is slowing globally, this does not look factored into credit spreads. Even with further stimulus in Europe, growth disappointments could negatively impact spreads and lead to underperformance against government bonds. A big portion of high quality European credit is trading at negative yields. While paying a sovereign to ensure principal return can be understood, ...