"I prefer corporate at this market stage"
'Particularly interesting high yields, but diversifying mainly on very liquid issues'
Key points
Claudio Cavaletti, Head of Bond Investments at L&B Capital Sgr, explains how to navigate the bond market and which segments to focus on in the coming months.
With stock indices running we often overlook the bond segment. What opportunities does it offer today?
In a stable interest rate environment, short-dated corporate bonds remain a good option for investors focused on generating a steady income (carry). It will be crucial to have a selective approach to cope with the different regional dynamics and to seize the best opportunities, given the dispersed growth and inflation outlook globally. In the current environment, we continue to favour good-quality government and corporate bonds, tending towards the 3/7-year curve and giving space in the short term to high yield.
What impact have recent central bank monetary policies had on markets?
Recent restrictive monetary policies of central banks have had a significant impact on markets, leading to higher borrowing costs and increased volatility. The move in the second half of 2025 towards a cycle of lower rates in an environment of gradually declining inflation has favoured bond funds, particularly those with longer duration, although yields have remained moderate and still subject to volatility.
And what should we expect next year?
Some central banks, such as the Fed, have started to cut interest rates, with the aim of stimulating the economy, which nevertheless leads markets to take neutral positions in anticipation of further cuts. In our assessment, the US will not go beyond a rate cut while in the Eurozone we expect everything to remain unchanged.
