Time to look at high-yielding corporate bonds

BOND yields may be rising, but we believe that there are opportunities within the high-yield, short-duration, fixed-income space.

The first quarter of 2021 was volatile for fixed income as interest rates, from US Treasuries to Singapore government bonds, staged a strong rally resulting in lower bond prices. Sovereign bonds have fallen and it is likely proof that bondholders are selling their holdings in the face of an improved outlook for economic growth and inflation.

US Treasury yields, for example, are climbing back to pre-pandemic levels. Comparing the yield curves on March 19, 2021 and Dec 31, 2020, longer-dated Treasuries have increased by 80 to 90 basis points (bps), while the demand for shorter-dated Treasury paper have remained strong.