With the US economy surprisingly resilient in the face of Fed tightening and as a peak in interest rates approaches, investors are coming around to the idea that bonds are back.
However, these bonds are not cheap, according to Sriram Reddy, Man GLG’s head of client portfolio management.
It is for this reason the firm is running some of its lowest allocations to US bonds in their global portfolios since launch, he told a recent media roundtable in Singapore.
“While all-in yields are relatively attractive, spreads – compensation you’re getting for corporate default risk – are no longer extremely cheap at this point in time,” he said.
“Certain markets we find are very expensive, such as the US market,” he explained. “We are more focused on opportunities in Europe among developed markets.”
The firm’s investment team is leaning towards the idea that interest rates will be higher for longer and as…
