Investment grade corporate bonds are normally as dull as ditchwater. But 2009 proved to be an exception as fears of a global economic depression receded and investors reassessed the likelihood of corporate default.
“Last year was a historic year of performance [for investment grade bonds],” says Eric Takeha, a senior fixed income portfolio manager at Franklin Templeton Investments. “However, if you put it in context, in the sell-off of 2008 we reached valuations not seen since the 1930s.”
In other words, last year’s surge was a bounce back after plunging the year before. Investment grade bonds have just got back to normal. View Full Article »