From Morningstar: 2024-11-04 10:35:00

The European Central Bank has confirmed a third rate cut, with inflation at 1.8% below the 2% target. More rate cuts expected if inflation remains stable. Bond investors are watching closely.

Despite low economic growth in Europe, investors are not fearing a recession. The yield curve is not inverted, signaling no imminent recession. High yield bonds are outperforming.

Bond managers see opportunities in the US, Europe, and the UK. They prefer high yield bonds in the current low interest rate environment for better yields.

High yield bonds are still in demand due to their performance in the current market. Default rates remain consistent with historical averages, supporting the strength of high yield.

Investors are favoring higher quality bonds in their portfolios, even as they move towards high yield. Tight spreads between government and corporate bonds are a key measure of value.

Bond managers are cautious as spreads are expected to tighten further. There are global high yield bond funds with Morningstar Medalist Ratings available in the Netherlands.



Read more at Morningstar: Where Are The Opportunities in High Yield Bonds Now…