​John Pattullo, Co-Fund Manager of Henderson Diversified Income, tells Asset TV why 2019 could be an interesting year for credit markets.


Bond: A debt security issued by a company or a government, used as a way of raising money. The investor buying the bond is effectively lending money to the issuer of the bond. Bonds offer a return to investors in the form of fixed periodic payments, and the eventual return at maturity of the original money invested – the par value. Because of their fixed periodic interest payments, they are also often called fixed income instruments.

Bear market: A financial market in which the prices of securities are falling. A generally accepted definition is a fall of 20% or more in an index over at least a two-month period. The opposite of a bull market.

Bull market: A financial market in which the prices of securities are rising, especially over a long time. The opposite of a bear market.

Credit: Refers to bonds within fixed income markets where the borrower is not a sovereign or government entity. Typically, the borrower will be a company or an individual, and the borrowings will be in the form of bonds, loans or other fixed interest asset classes.

Dividend: A payment made by a company to its shareholders. The amount is variable, and is paid as a portion of the company’s profits.

fixed interest: A loan or bond that pays a fixed rate of interest to the lender. Opposite to Variable rate.

Gearing: A measure of a company’s leverage that shows how far its operations are funded by lenders versus shareholders. It is a measure of the debt level of a company. Within investment trusts it refers to how much money the trust borrows for investment purposes.

High yield: A bond that has a lower credit rating than an investment grade bond. Sometimes known as a sub-investment grade bond. These bonds carry a higher risk of the issuer defaulting on their payments, so they are typically issued with a higher coupon to compensate for the additional risk.

Libor: London interbank offered rate. A widely-used benchmark rate that banks use to charge each other for short-term loans. It serves as a reference for short-term interest rates more widely.

Multi-asset: a combination of asset classes

Spread: The difference in the yield of a corporate bond over that of an equivalent government bond.

Yield: The level of income on a security, typically expressed as a percentage rate. For equities, a common measure is the dividend yield, which divides recent dividend payments for each share by the share price. For a bond, this is calculated as the coupon payment divided by the current bond price.