US high-yield corporate bonds will deliver strong returns in the second half of the year, according to investment manager Baring Asset Management - unless the US moves into a double-dip recession.
The firm believes that last week's deadline for the chief executives and finance officers of Fortune 500 companies to certify the financial reports of their companies will strengthen market confidence.
"The market has weakened as bad headlines regarding corporate America have continued to roll out and investors have withdrawn funds, but the companies themselves have reported little bad news,
said Baring's credit fund manager Toby Nangle.
Baring expects high-yield corporate bonds to outperform US government bonds.
Paul Grice, Baring's director of UK institutional business, said that bonds provided healthy diversification in the context of market volatility.