(Submit Articles) Clients of Wilkinson Bennings holding corporate bonds have been advised to re-assess their portfolio in light of the sector’s biggest monthly losses so far this year as demand strengthens for debt sold by companies.
This month securities are down about half a percent, better than the one percent drop of global government paper. Since May that brings a yield of nearly 1.75 on government debt. This shrinking yield gap signals growing confidence in the capability of corporate borrowers to meet their debt payments amid optimism the economy won’tstagger back into recession.
Fixed Income analysts at Wilkinson Bennings predict the corporate-government yield gap will continue to decline further. The claim is supported by an increase of net upgrades of credit ratings, where improvements have outstripped downgrades at a ratio of 2 to 1. This will bring many companies back to investment grade from the speculative category.
Common market indicators of company credit risk in America increased after falling last week. Yield premiums on investment-grade corporate bonds globally have narrowed 10 points this month, while yields rose 0.2 percent. Global high-yield spreads have tightened 60 points to date this month. Yields reduced to 8.3 percent from 8.6 percent. Those bonds have returned 1.91 percent this month.
It is important that you read the relevant documentation before you invest with any advisor to ensure you understand the specific risks involved and to determine whether it is a suitable product for you. Wilkinson Bennings provides copies of all relevant documentation free of charge upon request. The value of shares or funds, as well as any income from them can go down as well as up and you may not get back all that you have invested.
Wilkinson Bennings believes that the information within this release is accurate as at the date of publication. We cannot guarantee the accuracy, suitability or completeness of any such information after this date. We accept no liability for any data transmission failures such as data loss or damage or alteration of any kind. Accordingly Wilkinson Bennings accepts no liability for any loss or damage arising from the use of any part of this release.
Estimates of future returns or indications of past performance in this release are for information purposes and should not be considered as a guarantee of future performance. Changes in currency exchange rates may have an adverse effect on the value or income. The level of tax benefits and liabilities will depend on individual circumstances and may be subject to change in the future.
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