Jenna Barnard, Co-Head of Strategic Fixed Income, explains why she believes the second quarter of 2020 has been an idyllic environment for corporate bond investing.

 Key takeaways: 

  • Cheap valuations, very low government bond volatility and a realisation that company defaults would not be as high as originally anticipated, helped make the last three months an idyllic environment for corporate bond investing.
  • This confluence of factors is driving credit performance, even in the face of an onslaught of new issue supply and will likely continue into the third quarter.
  • We believe ‘sensible’ corporate bonds are the place to be and find government bonds and duration much less interesting than we have for a number of years. As we see it, divergence opportunities across the developed world are now coming through much more strongly in the credit markets.