According to Mark Munro, investment director, fixed income at Standard Life Investments, while many are of the view that everything within the fixed income market is expensive, there are opportunities, “you just have to look harder and further”.
One example of this, he says, is within old style tier one bonds within the US market, which are likely to be called by the banks within the next two or three years.
“These are the old style tier ones, not the AT1’s or Cocos, the regulator is telling them to do it [redeem them] and they are still yielding anywhere from 4 to 6% so if you take the time to do the credit work, there are some good pickings.”
