The search for yield is forcing investors to chase income by assuming more risk. Corporate bond spreads are now tighter than they were before the Global Financial Crisis, yet corporate leverage is higher. In contrast, financial bond spreads are up to eight times wider than 2007 levels, while bank leverage is less than half that which prevailed before the crisis. Buy financials, sell corporates.

Presentation  (4 mins)  |  Podcast

ABOUT THE AUTHOR

Christopher Joye is Chief Investment Officer and Portfolio Manager at Coolabah Capital Investments (Sydney),...