Wednesday, October 21, 2020

Bonds a safer bet in Covid-19 era, advises expert

May 14. 2020
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By The Nation

Some stability will return to the capital and bonds markets after central banks worldwide step in to supervise the market, said Kiattisak Preecha-anusorn, assistant vice president for Krungsri Asset Management’s Alternative Investment Department.

“This will help the credit spread of high-yield bonds to rise from 4 per cent to 12 per cent,” he said, adding that the current credit spread for high-yield bonds was between 8 and 9 per cent.

“Hence, we expect investors who hold high-yield bonds to gain more than 20 per cent from interest and price differences,” he added.

Kiattisak said Krungsri Asset Management has also started the Krungsri Diversified Income Fund (KFDIVERSE), which will be up for offer from May 19 to 26.

“This global bond fund will focus on investments in high-yield bonds in emerging markets,” he said. “PIMCO, a global investment management fund, will be responsible for finding returns on investments that are higher than the market, while individual investors can add this fund to their investment portfolio.”

Matthew Livas, senior vice president and credit product strategist at PIMCO, said investing in a global bond fund will help cut down on risks and offer a high return on investment now that global markets have become volatile due to the pandemic.

“We will focus on investment in line with the economy by analysing the worst situation and considering the liquidity of each investment assets to reduce risks and create high return on investment,” he said.

“Currently, PIMCO has created return on investment at 6.3 per cent per year.”

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