Fixed income managers are not expecting credit yields to widen over coming year

Managers say low return on cash and search for yield will support fixed income market

Unanimously, the UK fixed income managers we have interviewed think in 2010 the search for yield will continue to support corporate bonds, given the very low returns on cash. None of the managers expect credit spreads to widen in the coming months. The team at M&G sees a renewed bout of investor risk aversion as the main risk to the asset class. In line with others, the team at Invesco Perpetual expects yield-based returns for 2010. They believe there is a good chance spreads will tighten modestly from current levels. Credit metrics should improve as the economy grows again, earnings ...