Fixed income endured a tumultuous 2022. Monetary tightening by central banks led to bond yields rising and prices falling.
But today, sentiment is different with $152bn (£119bn) flowing into fixed income funds globally in the year to May, according to EPFR Global.
Yields are the main pull. In 2022, returns were negative and some of the worst on record, but today treasuries and bunds offer almost 5% and 3.2%, respectively, for holding your money for 12 months.
With an uncertain economic outlook, the asset class offers income, security and is a potential diversifier to equities.
But it’s not so good for borrowers, especially if they have floating-rate debt or need to refinance large fixed bond maturities.
According to the ICE BofA indexes, some borrowers could face paying 9% for high yield debt, while the average yield on global investment-grade corporate bonds is 5.1%. Could such a steep rise in borrowing costs force default risk higher?
With so many questions about how what is an important asset class, portfolio institutional invites you to take one of the limited audience places available to observe a discussion on what’s next for fixed income.
Fixed Income Roundtable | 12th, October 2023 | 2:00 pm – 5:00 pm
- Favourable markets
- Default risk
- Emerging markets