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Investment insights from Capital Group

Fixed Income
Global investment grade corporate bonds: a sector for all seasons
Peter Becker
Investment Director
Flavio Carpenzano
Investment Director

Heightened market volatility and uncertainty has once again refocused investors’ minds onto answering the question of the optimal route to constructing a well-diversified portfolio. The benefits of diversification are always sought, and while the correlation between equities and bonds turned positive in 2022, we expect that high-quality bonds should once again offer relative stability and diversification to risk assets, one of the key roles of bonds in a diversified portfolio, as central banks approach the end of their rate hiking cycles.

The global investment grade corporate bond universe is very diverse. This diversity provides fertile ground for a well-resourced asset manager to consistently add value to sector returns over a market cycle. Given the size of the investment universe, bottom-up security selection (one of Capital Group’s core strengths) is crucial to exploit any investment opportunities. Analysts conduct bottom-up research across industries, geographies and fixed income sectors to assess issuers’ financial condition and risk factors, potential debt-service roadblocks and new investment opportunities around the world. Analysts also leverage research and analysis conducted by the equity and macro research teams. This offers an information advantage given the depth of insights analysts are able to employ in building their portion of the fund.

In this research piece, we will look at the specific characteristics and drivers of market returns for global investment grade (IG) corporate bonds and how Capital Group approaches these factors to add consistent excess returns in this sector over the market cycle.

Peter Becker is an investment director at Capital Group. He has 27 years of industry experience and has been with Capital Group for five years. Prior to joining Capital, Peter was a managing director in the fixed income product management team at Wellington Management. Before that, he was a portfolio manager at Aberdeen Asset Management. He holds a master's degree from The Ingolstadt School of Management. He also holds the Chartered Financial Analyst® designation. Peter is based in London.

Flavio Carpenzano is an investment director at Capital Group. He has 18 years of industry experience and has been with Capital Group for two years. He holds a master's degree in finance and economics from Università Bocconi. Flavio is based in London.


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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.

Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.