Swiss Life Asset Managers continues to see a risk of rising yields for government bonds. It remains defensively positioned regarding the interest rate risk and overweight in corporate bonds.
After volatility increased in January, credit spreads on corporate bonds tightened again in February. Interest rates, however, have risen sharply in recent weeks. In February, 10-year US Treasury and German Bund yields increased by 30 bps and 20 bps respectively. Swiss Life Asset Managers expects this trend to continue over the next few weeks.
It also expects a further rise in inflation. This is due to the following factors: strong growth of developed markets, the huge stimulus package in the US and continued cheap central bank money.
Swiss Life Asset Managers therefore sees an ongoing risk of rising government bond yields. It remains defensively positioned with regard to the interest rate risk. It expects a low fluctuation range for corporate bonds and remains slightly overweight.
