Investment Grade Bonds: An Attractive Investment Opportunity in 2020 Heading into the last volatility catalyst of this year, price action in corporate Bonds has been quite interesting. According to a Credit Market Review by Papasavvas, the spreads for Investment-grade U.S. Bonds had increased for most of 2020, rising to around 170 basis points. Euro Investment-grade Bonds were indicated at 174 basis points at Friday’s close. That’s a lot of basis points, but they see the European high-grade corporate bond rally going strong.
The risk-reward combination for the corporate Bonds represents an attractive Investment opportunity. From the recent data, it is possible to see that Investment-grade Bonds have had a remarkable performance this year. Rising bond yields have put fixed income back in vogue as an Investment option. According to one analyst, “We favor high-quality Investment-grade Bonds relative to risk corporate Bonds.”
Preferred securities have many advantages over Investment-grade and distressed Bonds in the current market. According to Scapell, the preferred securities have a better yield-to-maturity than the Investment-grade Bonds and are also less volatile. Since yields rise when bond prices fail, this has made fixed income ETFs an attractive option for investors.