Bowie: corporate bonds will return 5% in 2011

Ignis' Chris Bowie believes total corporate bond returns will reach 5% in 2011 compared to the 10% highs achieved by the best performing funds this year.

Bowie, head of credit portfolio management and manager of the group's Corporate Bond fund, says although the asset class will continue to outperform, strong headwinds will lead to a drop in returns. "The real economy in the UK will be a challenging place in which to do business. Not in the sense we will be in a recession - far from it, as we expect growth to be in the 1%-2% range. "But modest growth will not lead to a substantial improvement in private sector employment, especially not on a net basis with the contraction of the public sector payrolls we expect," he says. "Because o...