A value approach for corporate bonds offers a higher risk premium for less actual risk

As a value investor Sparinvest has built an investment process to capture opportunities in the corporate bond market by value screening.

This means:

  • Focus on financial ratios, not ratings, (small cap, net debt/equity, interest cover, price/book),
  • Company analysis (financial reports, management style, competition),
  • Bond analysis (covenants, options, relative value).

Portfolios are thus constructed through a 100% bottom- up process with focus on value. This results in products offering a solid return at low risk.

By Klaus Blaabjerg, Head of Value Bonds team, Sparinvest.

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