With Europe in turmoil, Danish fixed income continues to be a 'safe haven'
Translation of the article in Frankfurter Allgemeine Zeitung, 22.04.2010, page B6
High yield bonds were the stars of the investment universe in 2009. This year, investors will still be able to earn hefty returns with these high-performance instruments. But careful selection has become even more important.
Corporate bonds rose to financial market stardom last year. On the “A-list” were high yield bonds, issued by companies with low credit ratings – making them relatively poor credit risks. In 2009, the Merrill Lynch Global High Yield (euro hedged) index grew by 60.7 percent. The global equity index MSCI World (TR, euro hedged) increased by only around half as much in the same period (30.8 percent). And despite all of the bad news from Greece, Portugal & co., investors stand to earn healthy returns with high yield bonds this year as well. The Merrill Lynch index has already seen a 2.9 percent increase since the start of the year, compared to the MSCI World, which has fallen by -0.6 percent (data as at 03 March 2010). What gives high yield bonds their star power?