INVESTMENTS & PENSIONS

This marketing communication is for professional investors only .

• After challenging years in 2022 and 2023 , falling interest rates could make bonds more attractive than cash .

• In investment grade , there has been a good amount of favourably-priced new issuance across sectors .

• We are more cautious on high yield , but believe some sectors could deliver positive returns thanks to momentum from a higher starting yield in the market .

2024 looks set to offer investors a good entry point to the asset class .

Both 2022 and 2023 were dominated by high inflation and interest rate hikes , which led to a sharp repricing of more duration sensitive parts of the market – government bonds and investment grade corporates . While high yield corporate bond markets performed much better , we are now more cautious of the impact of elevated refinancing costs and a deteriorating economic backdrop on more highly leveraged corporate issuers .

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