Investors should consider trading some of their sterling corporate bond holdings for dollar and euro denominated paper, Legal & General Investment Management claims.
The group believes as the economic outlook improves, higher yields will be found in cyclical companies in the non-sterling corporate bond space. Barclays Capital figures reveal utilities, communications and non-cyclical consumer businesses account for around 75% of new sterling issuance in 2009 so far. LGIM credit strategist Ben Bennett also says defensive corporates have traditionally provided very low yields and bond investors could switch some of their portfolio to cyclical sectors in order to increase yield opportunities. He says: "Diversification should be encouraged at all ti...
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