Overview of the previous quarter and outlook for Q2 2021
The global credit market saw a positive start into the year in Q12021 as spreads continued to tighten. However, total returns were negatively impacted by the global move toward higher rates. At the beginning of 2021, cyclical sectors came back to the forefront and outperformed. Energy and automotive sectors were among the winners, while utilities lagged the rally.
We think that the positive trend from the beginning of 2021 will continue into Q2, as vaccination efforts continue in addition to support from fiscal stimulus and monetary policy. We will remain positive for cyclical credit risk and see opportunities in lower rated credit risk in the coming months. Although valuation in the global credit market is not cheap anymore, we still see potential for further spread tightening.
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* The graphs, figures, etc., contained in these materials contain either past or back-dated data, and make no promise of future investment returns, etc. These documents make no guarantee whatsoever of future changes to the market environment, etc.
Opinions expressed in these documents may contain opinions that are not Nikko AM's but the personal opinion of the author, and may be changed without notice.
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