Although investment-grade bonds have performed well over the past few months, they may be too expensive for investors now, according to private banks.
Private banking clients had benefited from investing in investment-grade corporate bonds since last November, said Philip Jehle, head of the private clients unit for Asia at Lombard Odier Darier Hentsch (LODH).
Investment grade bonds have on average outperformed the S&P 500 index and the MSCI equity index by about 3 per cent.
But returns on bonds have come down since last month.
Kenneth Ho, head of products for Asia-Pacific at Julius Baer, said: 'Since the beginning of May, the JP Morgan Investment Grade Corporate Blended Spread Index has tightened considerably from 574 basis points to 393 basis points [as of June 18] - a decrease of 181 basis points in less than two months.'
Advisers said investors should not get into bonds now because the pricing of many investment-grade corporate bonds were too high.
