Is Now a Good Time to Buy Riskier Debt?
Pacific Investment Management Co. says investors should move out of government securities and into corporate credit because the U.S. will avoid a recession. With sovereign bonds in Japan and Germany offering negative yields, and equity valuations stretched, Pimco says high-quality company debt, junk bonds and bank loans offer a better risk-adjusted alternative. Investor demand for U.S. debt will be tested this week when the government auctions $24 billion of three-year notes Tuesday, $20 billion of benchmark 10-year securities the following day and $12 billion of 30-year bonds on March 10. Hermes Fund Managers Head of Equities Andrew Parry discusses with Bloomberg’s Anna Edwards on “Countdown.”