Hargreaves Lansdown head of research Mark Dampier says bond valuations are so attractive that he may invest in one for the first time in his career.
Dampier says spreads have ballooned to beyond the level they were in 2002 in the bear market despite the fact that we are not in a full-blown recession.
He says: “There has been a de-leveraging in corporate bonds that has led to the fall in price but sooner or later the status quo will come back and I feel now is the time to do some buying. Of course, they can go bust but that fear was always there. The opportunity to redeem at a greater rate is also there. Yields are higher than ever, with high-yield bonds up over 10 per cent in some cases.”
Informed Choice director Martin Bamford says: “They do play a major part but it is a tough call on the asset class. There is value but it may be only for the savvy as opposed to cautious investors.”