Investment Grade Quarterly Update – April 2025

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TwentyFour Asset Management’s Chris Bowie reflects on a politically eventful first quarter, its impact on European and US markets, and what it could mean for investors going forward.


 

Key takeaways

Investment grade market performance 

  • Political events including a new US president and German government have shaped market dynamics.
  • Spreads have reappeared for the first time in six months off the back of technology equity and earnings volatility in the US.
  • Risk sentiment weakened due to concerns over US growth quality and a potentially cooling jobs market, widening credit spreads by 10–15 basis points (bp).

Market outlook

  • The team has remained defensively positioned with lower spread duration compared to historical averages.
  • A modest further widening in spreads may present a strong opportunity to reintroduce risk and extend spread duration.
  • Fixed income continues to offer very attractive total credit yields.

 

 

 

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