Priya Misra, a portfolio manager at J.P. Morgan, emphasized the potential for investors to earn a 6.5% yield from high-quality companies without taking on additional credit risk.
This strategy is appealing for investors wary of the heavy exposure to artificial intelligence stocks, as fixed income offers a broader range of returns, including Treasury and credit investments outside of the tech sector. Misra co-manages the JPMorgan Core Plus Bond Fund ETF (JCPB), which has nearly $16 billion in assets, primarily in BBB-rated debt and above.
She noted an increase in exposure to double-B and single-B rated debt due to widening high yield spreads and mentioned a recent strategy shift towards increasing duration as interest rate movements may be stabilizing. The fund has experienced a decline of over 5% this year.
Joanna Gallegos, co-founder of BondBloxx, echoed the sentiment, advocating for corporate debt to capitalize on historically attractive yields and stable base rates, which she believes are being overlooked amid discussions about Treasury rates. Gallegos highlighted the strong fundamentals of corporations and ongoing economic growth as key factors supporting this investment approach