The case for investment grade corporate bonds

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Key takeaways

• Investment grade corporate bonds could play a vital role in terms of adding balance and resilience as part of a core fixed income allocation within a balanced portfolio.
• The asset class has provided an attractive alternative to developed market sovereign bonds, potentially offering both higher income and higher returns as well as diversification from equities and capital preservation.
• Credit markets have sold-off significantly since the beginning of the year, arguably presenting an attractive entry point for investors. However, recession risk is on the rise and careful selection in companies and sectors remains key.