"Value bonds are attractive because they will give you outperformance in the long run," says Klaus Blaabjerg, Head of the High Yield Value Bonds team at Sparinvest, emphasising that the value and small-cap effects generate excess returns in the longer term. Bonds from out-of-favour companies with a low debt-to-equity ratio help to stabilise the investor’s portfolio by minimising risk and boosting returns, he concludes.
Hear more about Klaus Blaabjerg’s views on credit markets.