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Global Investors Pour Into U.S. Company Debt as Hedge Costs Drop

Aug. 19, 2021, 5:43 PM

U.S. corporate bonds haven’t looked this attractive for European and Japanese investors since April, which could keep foreign demand for the securities high even amid signs of broader market weakness.

After hedging for currency risk, U.S. high-grade bonds offer 0.67 percentage point more yield than similar euro bonds, according to an analysis from JPMorgan Chase & Co. strategists earlier this week. Japanese investors can gain 0.62 percentage point, also the most in about four months.

“Overseas demand looks set to remain robust,” JPMorgan strategists led by Eric Beinstein wrote.

Money managers agree. Tom Moulds, a London-based senior portfolio ...

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