Corporate bonds still offer opportunities in 2021

Christian Bettinger, Head of Fixed Income – Euro flexibel Bonds looks at the balance sheet health of European issuers and highlights two attractive investment alternatives in the current nega-tive interest rate environment.

COVID-19 induced lockdowns, massive revenue losses, zombie companies and an impending wave of insolvencies – a flood of horror news kept the corporate bond market on tenterhooks in 2020. Nevertheless, after a correction of unprecedented speed and magnitude, many segments closed in positive territory, with risk premiums close to the levels at the beginning of the year. Can one continue to invest in corporate bonds with a clear conscience or is 2021 in for a rude awakening in view of valuations that are no longer favourable?

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Christian Bettinger
Head of Fixed Income Euro Flexible