“Today’s historically strong fundamentals suggest IG corporates are an attractive option to provide defensive ballast and to fulfil the role of capital preservation in portfolios. Additionally, with inflation gradually stabilising and central banks cutting rates, duration is once again providing a useful source of diversification,” said Peter Becker and Flavio Carpenzano, Investment Directors at Capital Group, in a July 2025 report.
Global investment-grade (IG) corporate bonds are offering some of the most attractive yields in over a decade, making them an increasingly compelling option for investors seeking to reinforce defensive allocations in their portfolios.
As at the end of June, global IG corporates provided a yield of around 5.2% on a USD-hedged basis, a level historically correlated with future five-year returns in the mid-to-high single digits.
