Ben Edwards, manager of the £917m BlackRock Corporate Bond fund, has maintained his 60% exposure towards BBB-rated bonds despite fears of a downturn that could result in investment grade vehicles falling to 'junk' status.
There have been warnings from fellow bond fund managers and central banks alike that with such a large portion of the investment grade credit market now in BBB bonds - the tier has grown from around 30% of the market to more than 50% in the past decade - a financial shock could see BBB bonds downgraded to non-investment grade or 'junk' status, leading to spiking borrowing costs and a higher risk of defaults. However, Edwards, who has run the fund since 2011, remains optimistic as he focuses on companies that should avoid being devalued in the case of a downturn. He said: "The goal of ...
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