Janus Henderson
Bonds still continue to play a crucial role in portfolios as they provide diversification and dampen volatility for those investors with exposure to equity markets
the market . For instance , despite rising towards the back end of the year , US government bonds ended 2021 down 2.3 % – their worst year since 2013 – while UK and eurozone government bonds returned -5.3 % and -3.5 %, respectively . Meanwhile , US high yield bonds returned 5.4 %, while eurozone high yield bonds climbed 3.4 % over the same period . Rather than sensibly searching for yield , some investors have been reaching for yield – scrambling to find higher yields , and often not paying due regard to the risks involved . In 2021 , there were increased flows into higher yielding assets , including emerging market debt , high yield corporate bonds , private and alternative credit . Corporate debt issuers were also keen to take advantage of historically low borrowing costs before the US Federal Reserve began hiking interest rates . By early November , US high yield bond issuance had surpassed the record issuance of
Issue 81 - February 2022 / 21 /