No bubble in corporate bonds: Woolnough

M&G's Richard Woolnough has dismissed growing concerns of a bubble in corporate bond markets, saying credit is still priced for a recessionary environment.

Woolnough - who runs the group's £4.6bn Corporate Bond, £3bn Strategic Corporate Bond and £2.6bn Optimal Income funds - says investment grade remains attractive, despite the manager recently offloading some positions to add to government debt. "I still like investment grade corporate bonds as investors are getting paid well for taking on credit risk," Woolnough says. "Spreads have come a long way since the crisis, yet they remain high. The yield curve is also steep, so you are getting paid an attractive yield to take the duration risk." Woolnough says parts of the high yield market...