Selective use of bonds
The environment for bonds has stabilised, but remains clearly differentiated. Following a phase of sharply rising interest rates, volatility has decreased significantly, with global interest rates falling for the most part, while yield curves have recently steepened. This means that investors are once again demanding higher compensation at the longer end of the maturity spectrum, which opens up selective opportunities. At the same time, the potential returns vary significantly depending on currency and segment.
Against this backdrop, targeted management of maturities is becoming increasingly important. Short-term bonds continue to offer high flexibility and lower interest rate sensitivity, while at the longer end of the yield curve, more attractive returns are emerging for investors with a medium-term investment horizon. Government bonds primarily fulfil a stabilising function in the portfolio. Fiscal issues, in particular the high level of debt in the US, require careful differentiation by maturity.
Corporate bonds are more attractive. Solid fundamentals, robust balance sheets and low default rates make investment-grade bonds a good choice as the core of your allocation. Selective exposure to higher-yielding segments can contribute to diversifying returns.
Regionally, we continue to see attractive yield opportunities, particularly in USD and EUR corporate bonds. Emerging market debt also looks promising: falling US interest rates, a weaker US dollar and improved earnings momentum argue in favour of selective positioning.
