Favourable conditions for corporate bond performance

With corporate bonds outperforming government in eight of the last 10 years, the asset class has finally become an accepted part of the investment market

After twenty years as the poor relation of the investment markets, corporate bonds have finally come into their own. For the first time in the UK, the size of the corporate bond market (£247bn in issue) has outstripped government gilts. Market forces ' regulatory change, slowing inflation, the reach for yield ' all favour corporate bonds. These trends are set to continue and nowadays any investment house worth its salt must have the capability to manage corporate bonds. The foremost influence on investor demand has, of course, been the dramatic decline in world inflation. While eq...