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Our views 16 October 2020

A new deal for bond investors

By Shalin Shah, Senior Fund Manager

5 min read

Shalin Shah, fund manager at Royal London Asset Management, on the outlook for BBB in times of crisis, mitigating risks in fixed income and potential pitfalls of green bonds.

What is the outlook for the BBB bonds you favour if market conditions deteriorate?

The BBB area is most at risk from widening spreads if we see a second wave of Covid-19. If a bond gets downgraded from BBB to sub-investment grade, then you lose about 10-20% straight off in performance because of its fallen-angel nature.

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