Credit Market Math Is Making Buyers Cash No Matter What Rates Do

Investors in the global corporate bond market find themselves in a situation where they make money whatever happens around them.

A big selloff in long-dated government bonds last month barely made a dent on total returns in credit. Yet when that was followed by a global bond rally in early September, credit’s gains were supercharged.

This recent invulnerability underscores a structural shift years in the making, which has made returns in the credit market the least sensitive to gyrations in sovereign debt for about a decade. Add still elevated yields into the mix and it’s smooth sailing for a number ...