Low govt bond returns push investors to corporate credit

But the higher yields come with greater risk, as bond holders can lose their investment if firms go under

The low fixed income returns have pushed investors and savers away to higher-yielding corporate bonds and other alternative investments. PHOTO: ST FILE
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Corporate bonds, on the other hand, have made an impressive recovery from the peak of the crisis in March-April when the Covid-19 outbreak turned into a pandemic.

The Bloomberg Barclays Global Aggregate Index, which covers investment-grade bonds in general, has returned close to 6 per cent year to date - better than the red-hot US S&P 500 stock index, which has returned 5.5 per cent in the same period.

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A version of this article appeared in the print edition of The Straits Times on October 10, 2020, with the headline Low govt bond returns push investors to corporate credit. Subscribe