Editorial


Mark Dunne Editor


m.dunne@portfolio-institutional.co.uk


Corporate bonds: Trapped


Institutional investors that have moved out of equities and into corporate bonds in the past few years could soon be getting that “out of the frying pan and into the fire” feeling. Locking in their gains appears a sound strategy with forecasts pointing to the volatility seen during 2018 being fiercer in the next year or two, ending the bull-run that saw equities consistently reach new heights in recent years. With yields on government debt crashing following the financial crisis, many schemes have turned to investment-grade corporate debt to protect their portfolios. The rush has created a problem that could leave investors counting their loses. High demand for such bonds has left some companies carrying too much leverage, while competition has seen loans issued on less onerous terms than they once would have been. Forecasts of slower global growth do not help to ease concerns.


The Bank of England, along with other central banks around the world, has waved a red flag at the level of corporate indebtedness. So defaults are a concern, but a more immediate problem is where do investors looking for stable investments put their cash?


Yields on freshly-issued debt that sits near the top of credit rating tables have fallen and so a rush to find alternative assets has already begun. Our cover story, which starts on page 34, looks at the options.


Issue 83 | April 2019 | portfolio institutional | 3


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44