Investment Grade
The 10-year Treasury term premium is now competitive with Baa- and Ba-rated credit spreads. Even without term premium compression, duration carry trades could outperform credit carry trades in a low rate vol environment.
This week’s Special Report evaluates the reward and risk in corporate bonds. We address the question of whether low expected excess returns today are justified by low risk or an example of overvaluation.
USD-denominated Emerging Market bonds have been outperforming US corporates for the past year. We don’t think the rally is exhausted yet.
