Looking ahead, he believes it may not be such a strong year for credit markets, and opportunities will be more selective: “Our experience is that we will continue to see a gentle upward drift in yields as data continues to show recovery.
“That said, it is difficult to see credit spreads making much progress during the year, as credit is pretty fully valued. There are some opportunities in financials, but stock selection is likely to assume far greater importance.”
The benign environment for fixed income appears to have ended, though there has, as yet, been no great rotation out of bonds. As yields have moved higher, new income-hungry buyers have moved in to support the market.
Equally, economic growth is not yet assured, meaning fixed income markets could still surprise in 2014.
Cherry Reynard is a freelance journalist
