Jenna Barnard and John Pattullo, Co-Heads of Strategic Fixed Income, join Adam Hetts, Global Head of Portfolio Construction and Strategy, to discuss all things corporate bonds. Topics include philosophy, making the right calls in the crisis, the chances of an aggressive recovery, the prospects of higher interest rates and whether 2021 offers a sweet spot for credit investing.

Key Takeaways

  • Covid 19 had a very different impact on the credit markets than the last two economic downturns. This was a three week market liquidity crisis, not a traditional solvency crisis with accompanying defaults. Markets remained open and willing to lend to Covid impacted names, albeit at a price
  • The crisis could also be followed by a surprising recovery, with the potential for a sharp rebound by next spring or summer. In such a scenario, could 10-year government bond yields be on the rise?
  • Recent vaccine and other market friendly news, market resilience this year and signs that companies are seeking to reduce leverage and improve balance sheets, support a positive outlook on credit moving into 2021