# Corporate Bonds Investment Philosophy



## fk (25 Feb 2003)

Does anyone have any opinions on the following statement :

'The belief is that corporate bond markets are inefficient at pricing credit risk relative to government bonds. Thus there are opportunities to obtain excess returns for the risk taken by means of a well managed, risk controlled portfolio. Anomalies can occur at the overall sector or stock levels.'


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## raul (25 Feb 2003)

*opinion*

'marketing piffle' springs to mind - corporate bonds,the yield on which is usually priced by reference to Gilts,are quite different. The torrent of CBs which have moved from Investment Grade to 'junk' in the last two years suggests that either investors, the rating agencies or both have mispriced the risk.


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