China’s high-yield bond market has been under incredible strain in recent months, with prices tumbling by nearly 40% since May. We’ve worked with our economists and LGIM’s high-yield team to determine whether this represents a deep value opportunity or trap. ;
ESG and long-term themes
As COP26 took place in November, the Bank of England fleshed out how its corporate bond purchases will reward companies taking action to make the economy greener. We think the BoE has taken a balanced approach to incentivising company behaviour, utilising a mixture of carrots and sticks, allowing a gradual phase-in of rules, and aligning with other areas of policy. Despite the small size of the programme overall, investors should still keep an eye out for how this might impact credit spreads in the sterling corporate bond market.