Bond investors could face more challenging markets in 2021.
- Fixed income investors will need to be creative in 2021, as low yields and tighter credit spreads could make attractive returns harder to find.
- A strengthening economic recovery in 2021 could favor fixed income sectors that potentially can do well in a rising interest rate environment.
- Yields in the credit sectors still appear relatively attractive. However, ample financing could allow weak firms to survive, lowering credit quality.