According to Bloomberg, corporate bond valuations are currently at record highs, signaling a major warning sign for investors. The influx of money from pension funds and insurers has intensified competition for these assets, leading to unprecedented levels of valuation. Despite this, investors seem unconcerned about the potential risks.
Many financial experts believe that these valuations are unlikely to normalize anytime soon. The low spreads between corporate debt and government bonds may persist for an extended period due to fiscal deficits affecting the attractiveness of sovereign debt.
Christian Hantel, a portfolio manager at Vontobel, notes that while spreads may appear tight, historical data shows that they can remain so for prolonged periods. This current environment reflects such a trend.
While some money managers view high valuations as cause for concern and see potential risks ahead,…
2025-01-04 15:00:00
Source from finance.yahoo.com