ETFs and the corporate bond sector

Investors nervous about the volatility of global equity markets and wary of possible sovereign debt defaults have sought more attractive risk adjusted returns by switching into corporate bonds. Morningstar calculates that in the year to 31 August the sector experienced an estimated net inflow of almost $10bn. The post Lehman Brothers credit crisis of 2008 forced many large companies to deleverage and this has resulted in some strong balance sheets. Consequently investment grade corporate bonds now look like a better proposition than significant parts of the sovereign debt market. Th...