Winds of change: Reasons to look at investment grade credit

Areas to consider

For fixed income investors, it has not been a pleasant year so far. But we have sensed some improvement in the US market, which has spurred a bounce in credit.

 In assessing the prospects for this exposure, we see positive signs in the outlook for inflation, the peaking of rates, economic growth and yield. Summer winds blowing in? The first five months of 2022 have been punishing for bond market investors. There are some hints, though, that the winds are changing direction, for the US market at least. Despite recent volatility, the yield on the 10-year US Treasury is still more than 10bp off the recent highs, which has helped to stabilise other markets, notably investment grade credit. Its longer duration versus pure Treasury exposure and ...