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 during the COVID-19 crisis, chances for an aggressive recovery, the prospects of higher interest rates and whether 2021 offers a sweet spot for credit investing.

Tune in to Global Perspectives, a series where our investment leaders discuss the biggest market trends and implications for investors.

Key Takeaways

  • COVID‑19 had a very different impact on 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 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, the market’s resilience, and signs that companies are seeking to reduce leverage and improve balance sheets support a positive outlook for credit as we move into 2021.